Skip to main content
Internet Archive's 25th Anniversary Logo

Full text of "U.S. security policy toward rogue regimes : hearings before the Subcommittee on International Security, International Organizations, and Human Rights of the Committee on Foreign Affairs, House of Representatives, One Hundred Third Congress, first session, July 28 and September 14, 1993"

See other formats


\fp.. 



U.S. SECURITY POUCY TOWARD ROGUE REGIMES 



rtii^ARINGS 




BEFORE THE 

SUBCOMMITTEE ON 

INTERNATIONAL SECURITY, INTERNATIONAL 

ORGANIZATIONS AND HUMAN RIGHTS 

OF THE 

COMMITTEE ON FOREIGN AFFAIRS 
HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRD CONGRESS 
FIRST SESSION 



JULY 28 AND SEPTEMBER 14, 1993 



Printed for the use of the Committee on Foreign Affairs 




JUH 2 i, /0S4 



^mTTTti 



r- 



U.S. GOVERNMENT PRINTING OFFICE 
76-426 CC WASHINGTON : 1994 

For sale by the U.S. Government Printing Office 
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 
ISBN 0-16-043984-1 



\6^ 



U.S. SECURin POUCY TOWARD ROGUE REGIMES 



i^\.F^G/\: 






BEFORE THE 

SUBCOMMITTEE ON 

INTERNATIONAL SECURITY, INTERNATIONAL 

ORGANIZATIONS AND HUMAN RIGHTS 

OF THE 

COMMITTEE ON FOREIGN AFFAIRS 
HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRD CONGRESS 

FIRST SESSION 



JULY 28 AND SEPTEMBER 14, 1993 



Printed for the use of the Committee on Foreign Affairs 




JUN2i, /034 



U.S. GOVERNMENT PRINTING OFFICE 
76-426 CC WASHINGTON : 1994 

For sale by the U.S. Government Printing OtTice 
Superintendent of Documents. Congressional Sales Office. Washington, DC 20402 
ISBN 0-16-043984-1 



COMMITTEE ON FOREIGN AFFAIRS 



LEE H. HAMILTON, Indiana, Chairman 



SAM GEJDENSON, Connecticut 

TOM LANTOS, California 

ROBERT G. TORRICELLI, New Jersey 

HOWARD L. HERMAN, California 

GARY L. ACKERMAN, New York 

HARRY JOHNSTON, Florida 

ELIOT L. ENGEL, New York 

ENl F.H. FALEOMAVAEGA, American 

Samoa 
JAMES L. OBERSTAR, Minnesota 
CHARLES E. SCHUMER, New York 
MATTHEW G. MARTINEZ, California 
ROBERT A. BORSKI, Pennsylvania 
DONALD M. PAYNE, New Jersey 
ROBERT E. ANDREWS, New Jersey 
ROBERT MENENDEZ, New Jersey 
SHERROD BROWN, Ohio 
CYNTHIA A. MCKINNEY, Georgia 
MARIA CANTWELL, Washington 
ALCEE L. HASTINGS, Florida 
ERIC FINGERHUT, Ohio 
PETER DEUTSCH, Florida 
ALBERT RUSSELL WYNN, Maryland 
DON EDWARDS, California 
FRANK MCCLOSKEY, Indiana 
THOMAS C. SAWYER, Ohio 

(Vacancy) 

Mjchael H. Van DUSEN, Chief of Staff 
Jo Webek, Staff Associate 



BENJAMIN A. GILMAN, New York 
WILLIAM F. GOODLING, Pennsylvania 
JAMES A. LEACH, Iowa 
TOBY ROTH, Wisconsin 
OLYMPIA J. SNOWE, Maine 
HENRY J. HYDE, Ilhnois 
DOUG BEREUTER, Nebraska 
CHRISTOPHER H. SMITH, New Jersey 
DAN BURTON, Indiana 
JAN MEYERS, Kansas 
ELTON GALLEGLY, California 
ILEANA ROS-LEHTINEN, Florida 
CASS BALLENGER, North Carolina 
DANA ROHRABACHER, California 
DAVID A. LEVY, New York 
DONALD A. MANZULLO, Illinois 
LINCOLN DIAZ-BALART, Florida 
EDWARD R. ROYCE, California 



International Security, International Organization and Human Rights 

TOM LANTOS, California, Chairman 

HOWARD L. BERMAN, California DOUG BEREUTER, Nebraska 

GARY L. ACKERMAN, New York OLYMPIA J. SNOWE, Maine 

MATTHEW G. MARTINEZ, California CHRISTOPHER H. SMITH, New Jersey 

FRANK MCCLOSKEY, Indiana DAN BURTON, Indiana 
THOMAS C. SAWYER, OWo , , 

■ • " Robert King, Staff Director 

Michael Ennis, Republican Professional Staff' Member 

Kenneth R. Timmerman, Professional Staff Member 

Beth L. POISSON, Professional Staff Member 

MaRYANNE Murray, Professional Staff Member 



(II) 



CONTENTS 



Page 

WmSfESSES 

Wednesday, July 28, 1993 
The Honorable R. James Woolsey, Jr., Director of Central Intelligence 5 

Tuesday, September 14, 1993 

William Potter, director, program for nonproliferation studies, Monterey Insti- 
tute of International Studies 56 

Stephen D. Bryen, president, Deltatech, and former Deputy Under Secretary 

of Defense for Trade Security Policy 63 

Joseph S. Bermudez, Jr., specialist in ballistic missile proliferation 66 

Ramon P. Marks, Esq., senior partner, Marks and Murase 69 

APPENDIX 

Prepared statements: 

Hon. R. James Woolsey 77 

William Potter 88 

Stephen D. Br>'en 99 

Joseph S. Bermudez, Jr 104 

Ramon P. Marks, Esq 113 

Letter from Chairman Lantos dated August 31, 1993 to Secretary of Com- 
merce Brown requesting documents 121 

Letter from Mr. Peter M. Sullivan, Acting Deputy Under Secretary, Office 
of Under Secretary of Defense, dated August 2, 1993 to Chairman Lantos 
regarding a request for documents relating to certain export license cases ... 123 
List of suppliers of dual-use technology to Iran, Libya, Syria and North 

Korea, as compiled by subcommittee stafT 124 

List of suppliers of dual-use technology to rogue regimes, as compiled by 

subcommittee staff 127 

1993 U.S. total exports of selected commodities to Iran 158 

Exports to Iran from OECD countries 1989-1992, as compiled by subcommit- 
tee staff 163 

Trade with Iran, Office of the Near East, December 1992 164 

Rebuttal statement from the Department of Commerce, Bureau of Export 
Administration, October 6, 1993 167 

(III) 



U.S. SECURITY POLICY TOWARD ROGUE 

REGIMES 



WEDNESDAY, JULY 28, 1993 

House of Representatives, 
Committee on Foreign Affairs, 
Subcommittee on International Security, 
International Organizations and Human Rights, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:05 a.m. in room 
2172, Rayburn House Office Building, Hon. Tom Lantos (chairman 
of the subcommittee) presiding. 

Mr. Lantos. The Subcommittee on International Security, Inter- 
national Organizations and Human Rights will come to order, 
please. 

Today, the subcommittee has the extraordinary pleasure of hav- 
ing the Director of Central Intelligence, Mr. James Woolsey, as our 
guest and our witness for this hearing on U.S. security policy vis- 
a-vis "Rogue Regimes." 

The "Rogue Regimes" are the international bomb- throwers, coun- 
tries which are on the periphery of the international system, coun- 
tries which have little stake in international order and are seeking 
through various reprehensible means to disrupt that order. 

These are the countries that are usually on the U.S. list of state 
sponsors of terrorism, countries that are under sanctions imposed 
by the United Nations for irresponsible and unacceptable inter- 
national behavior. 

The "Rogue Regimes," as I am using the term, are not nec- 
essarily a constant list. The regimes that would be included shift 
over time. At present, I personally would include in the list of such 
regimes Iran, Iraq, Libya, Syria, North Korea, Cuba, Serbia, the 
Sudan, and possibly Burma. 

I suspect that others might add additional countries or drop cer- 
tain ones. The general profile of these countries, however is quite 
clear from the description. 

The most serious threat that is posed by some of these "Rogue 
Regimes" is the effort that many have made to acquire nuclear 
weapons. In the last few months, we have witnessed the deadly se- 
riousness of the threat to international security from the acquisi- 
tion of nuclear weapons by some of these international renegades. 

North Korea has announced its intention to withdraw from the 
nuclear nonproliferation treaty among very clear indications that it 
has established a major nuclear weapons development program. 
While some recent developments might offer a bit of hope, we will 

(1) 



need some actions before we can rest more securely with respect 
to the intentions of North Korea. 

Internationally supervised inspections of Iraq, required by the 
United Nations after the Gulf War, have established in clear cer- 
tainty the frightening detail of how close Iraq was to possessing the 
capacity to produce nuclear weapons. Reports of Iranian efforts to 
purchase nuclear weapons, acquire nuclear expertise from some of 
the former Republics of the former Soviet Union indicate the very 
high priority the Ayatollahs have given to acquiring nuclear weap- 
ons. 

The spread of nuclear weapons is always an extremely serious 
concern, but the spread of nuclear weapons to these irresponsible 
regimes is a global threat of the highest order. It is one of the prin- 
cipal concerns of this subcommittee and of the American people. 

We are extremely fortunate to have with us today Mr. James 
Woolsey, Director of Central Intelligence. Our Nation is extremely 
well served to have a man of Mr. Woolsey's experience, intelligence, 
discernment and extraordinarily extensive experience for this key 
assignment. 

[The prepared statement of Mr. Lantos appears follows:] 

Opening Statement of Hon. Tom Lantos, Chairman, Subco.mmittee on 
International Security, International Organizations and Human Rights 

The Subcommittee on International Security, International Organizations and 
Human Rights will come to order. Today, the subcommittee has the pleasure of hav- 
ing the Director of Central Intelligence, James Woolsey, as our guest and witness 
for this hearing on U.S. Security Policy and the "Rogue Regimes." 

The "Rogue Regimes" are the international bomb-throwers, countries which are on 
the periphery of the international system, countries which have little stake in inter- 
national order and are seeking through various reprehensible means to disrupt that 
order. These are countries that are on the U.S. list of state sponsors of terrorism, 
countries that are under sanctions imposed by the United Nations for irresponsible 
international activity. 

The "Rogue Regimes," as we are using the term, are not necessarily a constant 
list and the regimes that would be included shift over time. At present, I would in- 
clude in the list of "Rogue Regimes" Iran, Iraa, Libya, North Korea, Cuba, Syria, 
Serbia, the Sudan, perhaps Burma. I suspect that other might drop some of these 
countries and include others. The general profile of the countries we are considering, 
however, is quite clear from this description. 

The most serious threat that is posed by some of these "Rogue" nations is the ef- 
fort some have made and several are now making to acquire nuclear weapons. In 
the last few months, we have witnessed the deadly seriousness of the threat to 
international security from the acquisition of nuclear weapons by some of these 
international renegades. 

North Korea has announced its intention to withdraw from the Nuclear Non- 
proliferation Treaty amid very clear indications that it has established a nuclear 
weapons development program. The Government of South Africa announced that is 
had not o..',' ■"stablished a nuclear weapons program, but that it had actually built 
a number of nuclear weapons without tne knowledge of the rest of the world. Inter- 
nationally supervised inspections of Iraq, required by the United Nations after the 
Gulf War, have established in frightening detail how near Iraq was to possessing 
the capacity to produce nuclear weapons. Reports of Iranian efforts to purchase nu- 
clear weapons or acquire nuclear expertise from some of the republics of the former 
Soviet Union indicate the high priority which the Ayatollahs have given to acquiring 
nuclear weapons. 

The spread of nuclear weapons is always an extremely serious concern, but the 
spread of nuclear weapons to these irresponsible regimes is a threat of the highest 
order, and one of my principal concerns and it should be one of the principal con- 
cerns of the American people and of the administration. 

We are fortunate to have with us today at this hearing, R. James Woolsey, the 
Director of Central Intelligence. Our Nation is well served to have a man of Mr. 
Woolsey's discernment and extensive experience in this key position. Director Wool- 



sey, we are delighted to have you with us today, and we are most appreciative of 
your testifying today in view of your very heavy schedule. 

Before we begin with Mr. Woolsey's statement, I would like to call on my col- 
league from Nebraska, the ranking Republican Member of the subcommittee, Con- 
gressman Doug Bereuter, for any opening remarks he would care to make. 

Director Woolsey, your full written testimony will be placed in the record in its 
entirety. You may proceed as you wish with your oral statement. 

Mr. Lantos. Before I call on Director Woolsey, I would like to 
call on my friend and colleague, the Ranking Republican, the dis- 
tinguished representative from Nebraska, Mr. Bereuter. 

Mr. Bereuter. Thank you, Mr. Chairman. I commend you very 
highly for scheduling this timely and important hearing, and a very 
special and warm welcome to Director Woolsey who is performing 
in extremely able fashion in his current responsibilities. 

During the past 4 years, I have had the privilege and responsibil- 
ity to be one of the two members of the Foreign Affairs Committee 
to serve on the House Permanent Select Committee on Intelligence. 
Serving on that select committee, I believe one gains an apprecia- 
tion for the diverse challenges that our intelligence service must 
face on the myriad of issues that must be mastered. 

It is a daunting challenge, one requiring diverse skills and intel- 
ligence collection modes plus special leadership to coordinate and 
use the best efforts, best effect of our numerous elements of the in- 
telligence community. Sometimes we forget about the fact he is the 
director of the intelligence community, and not just the CIA. 

I believe, in general, our intelligence service has provided excel- 
lent and timely information and that we work well with our friends 
and allies in intelligence collection and analysis. 

Frankly, there have been times recently where the intelligence 
community has had the proper information, the best insight on 
emerging issues; and it has not been used effectively by policy- 
makers. 

At today's hearings, we turn toward the regimes that create es- 
pecially difficult problems, both in terms of interpreting their in- 
tentions and their capabilities. The "Rogue Regimes" are those that 
have no commitment to the existing international order. "Rogue 
Regimes" play by their own rules. Their behavior is difficult to pre- 
dict and hard to deter. 

One of the problems with "Rogue Regimes" is that we under- 
standably do not have a good sense of what deters them. When we 
faced the former Soviet Union, we had a clear understanding of 
what it would take to deter adventurism by Brezhnev or Khru- 
shchev. It seems more difficult to deter Saddam Hussein or Qa- 
dhafi. 

"Rogue Regimes" present a particular problem in light of weap- 
ons 01 mass destruction. The chairman made reference a minute or 
two ago to the threat posed by North Korean actions with regard 
to nuclear proliferation. I have a particular concern regarding this, 
what some people call "loose nukes" emanating from the former So- 
viet Union. There are press reports of Libyan and Iranian rep- 
resentatives trying to hire Russian physicists. I hope that you. Di- 
rector Woolsey, would be able to address this issue at least briefly 
here today in a public forum. 

I also note that presenting his initial list of rogue nations, the 
chairman added a few new names a couple of days ago, Serbia and 



Sudan. Unfortunately, he is correct in adding these to the list of 
pariah states. It seems numerous names go on the list, but few 
come off. This leads to the question of how we can keep them from 
their outlaw behavior. 

These are important questions that you pose and that I have 
supplemented. Mr. Chairman, I know we have one of the best peo- 
ple in our Government to help us address these issues here today. 
Therefore, I am especially interested in looking forward to the tes- 
timony of the director, Mr. Woolsey. 

Thank you for being with us. 

Mr. Lantos. Thank you very much. 

Mr. Faleomavaega. 

Mr. Faleomavaega Mr. Chairman, I appreciate very much your 
invitation of having other members of our committee listen to Mr. 
Woolsey's statement this morning. I want to commend you also for 
calling this important hearing. Although I am particularly involved 
with the Asian and Pacific Subcommittee on Foreign Affairs, I do 
notice some of these countries we will be discussing this morning 
do fall within their jurisdiction. 

I do have very serious questions on the current situation involv- 
ing Iraq, what companies, what corporations are the ones that have 
been provided the Iraqi Government with the materials to develop 
nuclear capability. It seems perhaps of no surprise to many of us 
that it comes from Western companies. I am curious, perhaps later 
on with further investigations, how Iraq was able to come this far 
with its nuclear development. 

The question is somewhat of an irony, Mr. Chairman, perhaps 
also Mr. Woolsey can enlighten us further, the irony of all of this 
is that the United States is the largest seller, supplier of military 
weapons in the world. Maybe this is something we also need to, in 
introspection, look at what our policies are toward the area of nu- 
clear capability. 

We are saying, let's prevent proliferation, but at the same time 
we are, on the other hand, the biggest — one of the biggest sellers 
of military equipment to Third World countries. I wonder if maybe 
Mr. Woolsey can assist us in that in terms of what exactly is our 
policy. 

The question also of the effectiveness of IAEA's capability to 
oversee countries that supposedly have nuclear weapons or nuclear 
development as is processed, this has been one of the serious issues 
that has come out of the United Nations; but, Mr. Chairman, again 
I thank you for the opportunity. I am looking forward to hearing 
from ivi.. Woolsey. 

Thank you. 

Mr. Lantos. Thank you very much. 

Congressman Smith. 

Mr. Smith. I want to thank you, Mr. Chairman, for scheduling 
this hearing and welcome Director Woolsey to this subcommittee. 
I think it is important that this committee be fully apprised of on- 
going threats to our security and to that of our allies. 

Mr. Chairman, the promise of a more stable, secure, and peaceful 
world which we all felt at the end of the cold war has been largely 
shattered because of the continuing problems, hot spots, if you will, 
throughout the world. Bosnia comes to mind. The unstable situa- 



tion in North Korea vis-a-vis the South. A host of all other areas, 
the Sudan, the Middle East remains a hot spot. 

Hopefully, with the right combination of diplomacy, deterrence 
and good intelligence, we can hopefully deter threats from mani- 
festing themselves and as a consequence ourselves getting involved 
in warfare and things like that, 

I think this hearing is very important and look forward to Direc- 
tor Woolsey's comments. 

Mr. Lantos. Thank you very much. 

Congresswoman Snowe. 

Ms. Snowe. Thank you, Mr. Chairman. I would like to welcome 
our witness, Mr. Woolsey, here this morning. This is a very timely 
hearing. Certainly, when we are considering the intelligence au- 
thorization, but also in the post-cold war era and the issues of in- 
telligence, I think they become more critical and imperative. I want 
to welcome our witness here this morning. 

Mr. Lantos. Thank you very much. 

Before calling on the director, let me thank the outstanding work 
done by the staff of this subcommittee on both Democratic and Re- 
publican side. Ken Timmerman, Maryanne Murray, Mike Ennis 
and our staff director, Dr. Robert King. 

The Director of Central Intelligence usually works in the back- 
ground. I suspect many of the American people tj^Dically do not 
know the director's background. Let me spend a moment before 
calling on Mr. Woolsey to say a word about him. 

He is a native of Tulsa, Oklahoma. He received his bachelor's de- 
gree with greatest distinction from Stanford University, which be- 
fore reapportionment was part of my domain. He received a mas- 
ter's degree from Oxford. He is a Rhodes Scholar; and he has a law 
degree from Yale. 

He served with great distinction in the U.S. Army as a captain, 
was adviser to the U.S. delegation to the Strategic Arms Limitation 
Talks in both Helsinki and Vienna. 

He served as a program analyst in the Office of the Secretary of 
Defense and on the National Security Council staff. For years, he 
was General Counsel to the U.S. Senate Committee on Armed 
Services, and I am skipping a lot of his private endeavors. 

He served as our Ambassador to the negotiation on Conventional 
Armed Forces in Europe and a group of my colleagues and I had 
the pleasure of being briefed by him in a remarkably interesting 
session there some years ago. 

He is Director of Central Intelligence and he has brought a de- 
gree of openness to this very important entity that has involved 
probably more Members of Congress than we have ever seen in the 
history of the agency. 

Director Woolsey, we are delighted to have you. Your prepared 
statement will be entered in the record in its entirety. You may 
proceed any way you choose. 

STATEMENT OF R. JAMES WOOLSEY, JR., DIRECTOR OF 
CENTRAL INTELLIGENCE 

Mr. Woolsey. Thank you, Mr. Chairman. I am delighted to be 
here. I have Larry Gershwin, our National Intelligence Officer for 



Strategic Problems and Gordon Oehler Director of our Non- 
proliferation Center. 

Mr. Lantos. Pleased to have both of you. 

Mr. WoOLSEY. Following my prepared statement, if it is all right, 
I will ask them to join me at the table. Between the three of us, 
we will endeavor to answer here in open session everything that 
we can; but as I am sure you and the members of the committee 
are aware, intelligence sources and methods protection really dic- 
tates that a number of questions in this area be dealt with in exec- 
utive session. 

We are available at the call of the Chair today or at a later time 
for that. 

I do welcome the opportunity to speak to you this morning about 
the proliferation of weapons of mass destruction, nuclear, biological 
and chemical. Few issues have more serious and far-reaching im- 
plications for global and regional security and stability than the 
spread of these weapons. 

As you are aware, I testified in some detail to the Senate Govern- 
ment Affairs Committee in February of this year. Much of my 
statement in that hearing remains valid today, but a full picture 
requires some repetition. There are a number of developments on 
which I can provide updates. 

Before I begin, I would like to emphasize that although I believe 
speaking openly on the critical issue of the proliferation of weapons 
of mass destruction is important and useful, I must balance that 
objective with my responsibilities to protect sources and methods. 

I would like to begin by briefly outlining a few significant devel- 
opments since February. 

NORTH KOREA 

First, North Korea, which I identified earlier this year as our 
most urgent national security threat in East Asia, continues to be 
of great concern. I cannot go into much additional detail because 
of the ongoing discussions with the North Koreans. 

North Korea's decision to suspend its withdrawal from the NPT 
was certainly welcome, and we hope it portends a more cooperative 
attitude and greater willingness to submit to its commitments 
under the NPT. This includes cooperating with the IAEA to main- 
tain inspections. 

Clearly, we are not out of the woods. 

Mr. Lantos. If I may stop you for a second, I think it is useful 
initially to identify the NPT as the nonproliferation treaty and the 
IAEA as the International Atomic Energy Agency. 

Mr. WooLSEY. Absolutely. 

Clearly, Mr. Chairman, members, we are not out of the woods on 
this issue with North Korea yet. Progress is going to depend on 
North Korea's following through with productive discussions with 
the IAEA. I must stress that our assessment that the North Kore- 
ans could have produced enough plutonium for at least one nuclear 
weapon still applies. Thus, this issue continues to require every- 
one's closest attention. 

When I testified in February, I described a new North Korea mis- 
sile with a range of about 1,000 kilometers that was still in the de- 
velopment stage. I can now confirm that the North Koreans re- 



cently tested the missile, which in addition to conventional war- 
heads, is capable of carrying nuclear, chemical, or biological pay- 
loads. Of greatest concern is North Korea's continued efforts to sell 
the missile abroad — particularly to dangerous and potentially hos- 
tile countries such as Iran. 

Deployment of this missile will provide an important increase in 
the capabilities of various countries to attack their neighbors. With 
this missile, North Korea could reach virtually all of Japan; Iran 
could reach Israel; and Libya could reach U.S. bases and allied cap- 
itals in the Mediterranean region, 

IRAQ 

The situation in Iraq has also changed somewhat since I last 
spoke publicly. Upon his return from Iraq, Ambassador Rolf Ekeus, 
Chairman of the U.N.'s Special Commission, announced that Iraq 
had agreed to the U.N.'s demand to install cameras at a missile fa- 
cility and, most importantly, to accede to long-term monitoring 
under U.N. Resolution 715. 

More details will become available in the coming weeks as 
UNSCOM formulates the U.N. response to Iraq's position and dis- 
cusses the mechanics of long-term monitoring with the Iraqis. 
While Iraq's recent statements offer some promise, I am reminded 
that we have heard positive sounds from Iraq before, with little or 
no follow-through. 

It has been a long and frustrating 2 years for the rest of the 
world, during which time Iraq has doggedly prevented the U.N. 
from implementing the Security CounciPs mandate. As with North 
Korea, we will have to measure Iraq's true intentions by deeds, not 
words. 

Meanwhile, the U.N. continues its work in Iraq, dismantling pro- 
hibited programs for weapons of mass destruction. Iraq's harass- 
ment of inspectors has not deterred the U.N. from continuing to de- 
stroy a vast chemical munitions and agent stockpile, to dig out de- 
tails about past activity, and to search for hidden missile, biologi- 
cal, and nuclear capabilities. 

Iraq's programs for weapons of mass destruction were heavily 
damaged by coalition attacks during Desert Storm. Nearly 2 years 
of intrusive U.N. inspections and the imposition of strict inter- 
national sanctions have set back their efforts as well. Iraq has 
struggled to maintain important elements of each program, hoping 
to outwait the United Nations and to rebuild its infrastructure for 
weapons of mass destruction once inspections and sanctions cease. 

We will continue to support strongly the multilateral effort to im- 
plement all relevant U.N. resolutions. Neither we nor the U.N. 
have lost sight of the basic fact that critical elements of Iraq's pro- 
grams remain hidden. Therefore, intrusive inspections remain an 
important element of any monitoring regime. 

FORMER SOVIET UNION 

Another key area, and one that continues to be of great concern, 
is the dissolution of the Soviet Union and the resulting opportuni- 
ties for proliferating countries to acquire sensitive technologies and 
material. This is a regular subject for media speculation. Sensa- 
tional stories about sales of nuclear weapons, fissile material, and 



8 

strategic missiles from the states of the Former Soviet Union are 
becommg commonplace. We continue to check out each one, but 
have not, to this point, detected the sale or transfer of significant 
nuclear material, nor the sale or transfer of the weapons them- 
selves. 

We also continue to receive reports of brain drain from the 
former Soviet Union. Delays in pay, deteriorating working condi- 
tions, and imcertain futures are apparently spurring Russian spe- 
cialties to seek emigration despite official restrictions on such trav- 
el. We also treat each of these reports seriously and attempt to de- 
termine the veracity of each. 

We continue to be concerned with a number of agreements under 
consideration by the Russian Government that involve transferring 
technology — particularly several being negotiated with Iran for nu- 
clear-related technology and reactors. Given Iran's ambitions to de- 
velop nuclear weapons, we must assume that any assistance to 
Tehran in the nuclear arena could assist their development of a nu- 
clear weapons capability. 

IRAN 

Indeed, our concerns about Iran's intentions to dominate the re- 
gion, its potential threat to U.S. interests and allies in the Middle 
East, and its military buildup, have not diminished since I last 
spoke on this subject in February. Iran still poses a potential 
threat to its smaller neighbors and to the free flow of oil through 
the Gulf It continues to support terrorism as an instrument of 
international policy. 

And Iran's ambitious effort to develop its military and defense 
sectors includes a serious, determined program to develop all cat- 
egories of weapons of mass destruction. Unable to obtain what it 
wants from the West, Iran has increasingly looked to Asian sources 
for aid — to North Korea for long-range Scuds, shorter and medium- 
range ballistic missiles, and now the 1,000 kilometer range missiles 
and to China for a variety of other dangerous technologies. 

Iran's nuclear weapons program remains at a relatively rudi- 
mentary stage. We continue to believe that Iran probably will take 
at least 8 to 10 years to build its own nuclear weapons, and 
progress will depend on foreign assistance. Knowing Iran's hostile 
intentions, any requests for potentially sensitive technology or ma- 
terial must be viewed with great suspicion, even when it is claimed 
that such material is destined for legitimate civilian uses. 

OVERVIEW OF PROLIFERATION PROBLEMS 

Now I would like to briefly present a general overview of the pro- 
liferation problems we face. A growing number of countries are 
seeking advanced weapons, including nuclear, chemical, and bio- 
logical weapons, as well as missiles to deliver them. As inter- 
national awareness of the problem grows, these countries are be- 
coming increasingly clever in devising networks of front companies 
and suppliers to frustrate export controls and to buy what would 
otherwise be prohibited to them. 

The challenge we face in controlling proliferation is complex and 
multifaceted. We must decipher an intricate web of suppliers, mid- 
dlemen, and end users. We must distinguish between legitimate 



and illicit purposes, particularly for dual use technology. And we 
must help interdict the flow of material, technology, and know-how 
to potential proliferating countries. 

We do not expect any nations beyond Russia and China to bring 
together the requisite materials, technologies, facilities, or exper- 
tise to develop and produce ICBM's capable of striking the United 
States during this decade. Several nations with space launch capa- 
bilities could modify those launchers to acquire a long-range ballis- 
tic missile, but we do not expect any nation now having space 
launch vehicles — India, Israel, and Japan — to do so. 

After the turn of the century, however, some nations that are 
hostile to the United States may be able to develop indigenously 
ballistic missiles that could threaten the United States. We also re- 
main concerned that hostile nations will try to purchase from other 
states ballistic missiles capable of striking the United States. A 
shortcut approach — prohibited by the Missile Technology Control 
Regime and Nuclear Proliferation Treaty — would be to buy ICBM 
components covertly, together with suitable nuclear warheads or 
fissile materials. The acquisition of key production technologies and 
technical expertise would speed up ICBM development. 

Meanwhile, the threat from theater ballistic missiles is current, 
real, and growing. For decades now, the international community 
has worked from the premise that the more countries that possess 
these weapons, the greater the likelihood they will be used. 

Just a brief overview of proliferation concerns around the globe 
underscores the threat posed to the United States, to our interests 
abroad to our friends and allies. This overview will also underscore 
the importance of stemming this trend. 

More than 25 countries, many of them hostile to the United 
States and to our friends and allies, may now have or be develop- 
ing nuclear, biological, and chemical weapons, and the means to de- 
liver them. 

Aside from the five declared nuclear powers, several countries 
have, or are developing nuclear weapons capabilities. Iraq and 
Iran, for example, have the basic technology to develop eventually 
such weapons. 

More than two dozen countries have programs to do research on 
or develop chemical weapons, and a number have stockpiled such 
weapons, including Libya, Iran, and Iraq. The military competition 
in the always volatile Middle East has spurred others in the region 
to pursue chemical weapons. We have also noted a disturbing pat- 
tern of biological weapon development following closely on the heels 
of the development of chemical weapons. 

More than a dozen countries have operational ballistic missiles, 
and more have programs in place to develop them. North Korea 
has sold Syria and Iran extended range Scud Cs, and has appar- 
ently agreed to sell missiles to Libya. Egypt and Israel are develop- 
ing and producing missiles, and several Persian Gulf states have 
purchased whole systems as well as production technology from 
China and North Korea. Some have equipped these missiles with 
weapons of mass destruction, and others are striving to do so. 



10 



TERRORIST THREAT 



So far, I have addressed the dangers of nations acquiring or de- 
veloping weapons of mass destruction, but we must also anticipate 
the possibility that hostile groups, specifically terrorist groups, 
might acquire these weapons with or without state sponsors. Cer- 
tainly the bombing of the World Trade Center in New York last 
February has heightened our sensitivity to the prospect that a ter- 
rorist incident could involve weapons of mass destruction. 

I would like to stress that we have no evidence that terrorists 
currently are developing or attempting to acquire such weapons. 
The extreme risk and complexity of handling these weapons sug- 
gest that they would not necessarily be the terrorist weapon of 
choice. 

Nuclear weapons would be especially difficult for a terrorist orga- 
nization to develop, acquire, or use. Terrorists would need a consid- 
erable amount of sophistication to transport and activate these 
weapons. Chemical and biological weapons, on the other hand, 
have always proven to be more accessible because the materials are 
cheaper, more readily available, and have more dual-use functions. 
Consequently, the acquisition of components to produce chemical 
and biological weapons is more difficult to track and counter even 
though the export of certain key materials are restricted. 

While we have no evidence of any weapons of mass destruction 
in the hands of terrorists, we must remain alert to the possibility 
that such groups might acquire them. The enormous destructive 
power that could be wrought by a small, but hostile element be- 
yond or within, I might add, the control of a central government, 
compels our attention. 

MOST DANGEROUS PROLIFERATION THREATS 

Let me now briefly describe some of the causes of proliferation 
and outline some of the most dangerous proliferation threats. 

Nations continue to seek these weapons for a wide variety of rea- 
sons. Most nations perceive real benefits from the destructive 
power these weapons represent to their national security. Others 
value them for the prestige that leaders believe they convey, while 
some seek them to dominate their neighbors. A few countries, such 
as Iraq, develop these weapons not just for symbolic reasons, but 
to actually use — against their enemies in war or, tragically, on 
their own people. Others think that the only way to offset a hostile 
neighbor's threatening weapons is to develop similar capabilities. 
We can see this particularly in South Asia, where mutual Indian 
and Pakistani suspicions have fueled a nuclear arms race, in- 
creased the risk of conflict, and gravely increased the cost of war 
if war occurs. Still others view these weapons as a way to buy secu- 
rity on the cheap, a shortcut to achieving a military capability that 
they believe will serve as a compelling psychological deterrent. 

Russia's ability to maintain control of its special weapons and as- 
sociated technologies has somewhat weakened under the stresses 
and strains of the Soviet breakup. Today's faltering CIS economy 
and the attendant hardships among individuals with military and 
scientific expertise could lead to more disturbing military transfers 
and could also encourage illegal exports of technology or material. 



11 

Tens of thousands of former Soviet scientists were involved in sen- 
sitive weapons programs; many may be tempted by more lucrative 
work abroad. The current emigration and customs bureaucracies 
cannot monitor more than the most critical personnel. 

Since I last testified, the news on export controls in Russia and 
other former Soviet states has been mixed. President Yeltsin ap- 
parently is trying to tighten controls on strategic materials, but at 
the same time economic pressures are prompting other Russian of- 
ficials to oppose implementing more rigid export regulations. These 
economic nationalist pressures are causing some Russian and 
Ukrainian officials to question the wisdom of adhering to the Mis- 
sile Technology Control Regime. In a recent arms show in Moscow, 
the Russians advertised a derivative of the old SS-23 for sale as 
a civilian rocket, raising additional MTCR concerns. Moreover, at 
an arms show in Abu Dhabi earlier this year, the Russians adver- 
tised an improved warhead for the Scud — an unwelcome develop- 
ment indeed, given the already widespread proliferation of this 
missile. 

Resolving the dispute over control of strategic forces in Ukraine 
remains critical to establishing a more stable security environment. 
We face a critical period as Russia attempts to maintain control 
over all of the some 27,000 tactical and strategic nuclear warheads 
within the former Soviet Union, in the face of political difficulties, 
violence on its borders, and the possibility of disruptions within 
Russia itself. Although to date we believe that all of the tactical 
warheads have been returned to Russia, nearly 3,000 strategic war- 
heads remain outside Russia. 

The Russians continue to maintain strong centralized control of 
their nuclear forces, and we think that under current cir- 
cumstances there is little prospect of a failure of control. But we 
are concerned about the future. Leaders in Russia and the other 
three states where the warheads are located have pledged to de- 
stroy much of the former Soviet stockpile, but it will take more 
than 10 years to do so unless the process can be speeded up. 

The former Soviet Union is by no means the only source for coun- 
tries seeking sensitive technology and materials for weapons of 
mass destruction. For every shipment we stop from other countries, 
new suppliers seem to appear, willing to manufacture, broker, sell, 
and transport material to any and all clients, no matter how dan- 
gerous or unsavory. And while we have witnesses progress on con- 
trolling the supply side of the equation, we detect little reduction 
in the demand for weapons of mass destruction. As long as nations 
perceive these weapons as enhancing their security, and others are 
willing to sell them, we will all have our work cut out for us. Na- 
tions that seek these weapons, such as Iran, Iraq, and North 
Korea, aren't going to give up because we reorganize or because we 
claim that we are more effective. 

LIBYA 

Mr. Chairman, several other problem areas are also of concern 
and worth mentioning briefly. Libya continues to try to import 
technologies for its missile programs, and certainly no one has for- 
gotten Colonel Qadhafi's public statement about his quest for a nu- 
clear bomb. 



12 

Even as it publicly proclaims its good intentions, Libya is con- 
structing a second chemical weapons production facility. The new 
facility recently described in the media is yet another indicator of 
the extent to which Libya — apparently unchastened — will go to 
evade international attempts to prevent its development of chemi- 
cal weapons. 

Fortunately, the U.N. sanctions imposed in the aftermath of the 
Pan Am 103 incident are assisting nonproliferation efforts. Earlier 
this year, the U.N. sanctions committee blocked a shipment of 
chemical reactors destined for Libya, recognizing officially for the 
first time that Libya has an offensive chemical weapons program. 

Mr. Lantos. May I stop you on that point for a second? 

Mr. WooLSEY. Yes, Mr. Chairman. 

Mr. Lantos. From what country did that shipment to Libya 
originate? 

Mr. WooLSEY. It was Malaysia, Mr. Chairman. 

Mr. Lantos. Thank you. Malaysia, I take it, was a transit point. 
It didn't originate in Malaysia. Malaysia presumably bought it 
someplace? 

Mr. WooLSEY. As far as we know, it was manufactured in Malay- 
sia. 

Mr. Lantos. As far as you knew, it was manufactured in Malay- 
sia? 

Mr. WooLSEY. Yes. 

Mr. Lantos. Thank you. 

Mr. WooLSEY. The tJ.N. found that the dual use equipment was 
destined for a military program and thus was prohibited under 
U.N. sanctions. Libya also continues its efforts to develop a ballistic 
missile capability, and to this end is scouring the West for tech- 
nology and assistance. Only strict scrutiny and constant attention 
has prevented the Libyans from acquiring what they need. 

INDIA AND PAKISTAN 

The arms race between India and Pakistan poses perhaps the 
most probable prospect for future use of weapons of mass destruc- 
tion, including nuclear weapons. Both nations have nuclear weap- 
ons development programs and could, on short notice, assemble nu- 
clear weapons. Neither India nor Pakistan seems to scrimp on re- 
sources for their expensive military programs, despite their eco- 
nomic conditions and widespread poverty among their citizens. In- 
dia's program, older and probably larger than Pakistan's, cul- 
minated in 1974 with a nuclear detonation, and we are convinced 
has progressed from there. 

A nuclear exchange on the subcontinent would be devastating. 
Millions of innocent civilians in this densely populated region 
would be vulnerable, particularly as each side strives to develop 
missiles which can reach deeper into the other's territory, putting 
at risk major population centers, including Islamabad and New 
Delhi. 

CHINA 

China is also a major proliferation concern, as an alternative 
supplier when Western export controls make technology and weap- 
ons more difficult to acquire. China acceded to the Nuclear Non- 



13 

proliferation Treaty and agreed to abide by the Missile Technology 
Control Regime last year. More recently, it signed the Chemical 
Weapons Convention. These are all positive developments, but we 
remain watchful for signs that China is not living up to its commit- 
ments. The breadth of Chinese contacts with potential proliferators 
makes detecting and confirming potentially dangerous transactions 
difficult. 

As Iran's principal nuclear supplier, China has supplied research 
reactors and other technology. While China's dealings with Iran 
have been consistent with the NPT, it is of concern nonetheless 
given Iran's pursuit of a weapons capability. 

On the other hand, China's relationship with Pakistan is of 
greater concern. I am sure you have noted the press over the past 
6 months covering China's reported sales of missiles to Pakistan. 
We are concerned about reports that indicate China has trans- 
ferred M-11 related missile equipment to Pakistan, and we are 
monitoring this issue carefully. We are also concerned about 
Beijing's missile and chemical transfers to the Middle East. 

I wish I could come to you, less than half a year after my last 
testimony on this subject, with better news and report that we 
have witnesses great strides toward solving the problem of pro- 
liferation. But once again, I have painted a rather bleak picture be- 
cause I am afraid accuracy and candor require bleakness. The 
spread of nuclear weapons capabilities is of utmost concern because 
of the horrible destructive capacity. It will put millions of innocent 
civilians at risk and dramatically change regional security land- 
scapes wherever these weapons are introduced. 

A North Korean nuclear weapon would threaten our allies in all 
of Asia as well as U.S. forces in the region. Iraq's indiscriminate 
use of chemical weapons in its war with Iran underscored the ur- 
gency in our efforts to stop the spread of and ultimately banish this 
whole class of weapons. And lastly, countries persist in pursuing 
biological weapons development, one of the most troubling capabili- 
ties of all, despite a strong international consensus to the contrary. 

INTELLIGENCE COMMUNITY ACTIVITIES 

The Intelligence Community recognizes the urgency of this prob- 
lem and is responding to the increasing threat and to the ever-in- 
creasing demands of our intelligence consumers for information on 
this vital issue. Indeed, by drawing attention to this issue, we are 
seeing a growing awareness in the international community about 
the dangers of proliferation and an increasing willingness to co- 
operate multilaterally to stem the spread. As a result, we are all 
making it more difficult for proliferating nations to develop dan- 
gerous weapons programs. 

A nonproliferation initiative last year set forth principles to 
guide our nonproliferation efforts. The Intelligence Community was 
instructed to accelerate its work in support of U.S. efforts to stem 
the spread of weapons of mass destruction, and to broaden our sup- 
port to international organizations and increase the pool of experi- 
enced, well-trained experts committed to the nonproliferation agen- 
da. 

The Nonproliferation Center, formed about 1 year ago, is focus- 
ing our efforts in the crucial area and improving our support to the 



14 

policy, operations, licensing, and enforcement agencies. And we are 
making some progress. But this is a complex issue which cannot 
be tackled easily or quickly. It requires a long-term commitment, 
patience, and perseverance. 

A virtue of intelligence is no longer measured only by how much 
it adds to our knowledge of a particular subject. It is also measured 
by how we have directly contributed to United States and multilat- 
eral actions to stop proliferation. 

A number of the questions in which the committee has expressed 
interest address the Intelligence Community's ability to contribute 
directly to countering proliferation and developing actionable intel- 
ligence to enable us to track and, ultimately, to interdict the flow 
of dual-use technology. 

Mr. Lantos. Would you define actionable intelligence, Mr. Direc- 
tor? 

Mr. WooLSEY. Intelligence which would lead the United States 
or its allies actually to take action in the short run to stop some- 
thing that is underway. For example, Mr. Chairman, intelligence 
that a company in an European — friendly European country was, 
unbeknownst to that country, exporting some dual use technology 
that was destined for a chemical weapons program; thus enabling 
the United States to take action by a demarche, let's sav, approach- 
ing the country in question and letting it have the information to 
activate its export control regime. 

Mr. Lantos. Thank you. 

Mr. WooLSEY. We have put a heavy emphasis on collecting this 
type of information, and are making every effort not only to im- 
prove access to it within our own government, but also to increase 
sharing among allies who, given the right information, can and do 
contribute to our common goal. Already, the United States is dis- 
covering a willingness among nations to take decisive action 
against proliferators. 

ROLE OF THE UNITED NATIONS 

I know you are interested in U.S. support for international orga- 
nizations. The U.N.'s actions in North Korea and in Iraq illustrate 
how multinational support to international organizations has 
broadened the mission of the Intelligence Community. We have 
seen some remarkable changes in the world in just the past few 
years, with the U.N. taking a much more active role on the inter- 
national scene in the aftermath of the cold war. 

This should grow in the future due to new international agree- 
ments such as the Chemical Weapons Convention and to strength- 
ened existing agreements such as the Nuclear Nonproliferation 
Treaty, the Biological Weapons Convention, and the Missile Tech- 
nology Control Regime. 

These agreements are attracting more attention and wider mem- 
bership, and we are seeing stricter enforcement. These agreements 
will require the full support of all member states, not just the Unit- 
ed States, to monitor compliance and ensure enhanced global secu- 
rity. We intend to cooperate aggressively and productively. The 
United States, among many other nations, remains committed to 
providing the U.N. the information and support it needs to com- 
plete its mission in Iraq and elsewhere. 



15 

Working closely with the State Department, we have shared an 
unprecedented amount of information with the United Nations, as- 
sisting them in completing their new missions. 

Clearly, strengthening the IAEA must go hand-in-hand with re- 
newing and reinforcing the Nonproliferation Treaty. We have al- 
ready witnesses a new willingness by the agency to pursue safe- 
guards inspections more aggressively. 

Mr. Chairman, I would like to close on a not of optimism, how- 
ever tempered with caution. During the past 2 years, three na- 
tions — France, South Africa, and China — became new signatories of 
the NPT. Membership in other multilateral institutions such as the 
Australia Group and the Missile Technology Control Regime is ex- 
panding. Argentina is interested in joining the MTCR and is dis- 
mantling its Condor missile program. Germany, once a high tech- 
nology supermarket for a range of troubling exports and countries, 
has enacted strict export controls. 

We have made some important headway in making the prolifera- 
tion of weapons of mass destruction a more difficult, expensive, and 
lengthy proposition. Obtaining these troubling capabilities today is 
a much more difficult task than it was a few years ago. 

I believe the Intelligence Community has made significant 
progress on this. Throughout our approach and our continued co- 
operation with other agencies involved in policy, enforcement, li- 
censing, and operations, we are setting the state that will allow us 
to make further progress in countering proliferation activities 
worldwide. 

Mr. Chairman, that concludes my statement. 

[The prepared statement of Mr, Woolsey appears in the appen- 
dix.] 

Mr. Lantos. Thank you very much. Director Woolsey. This was 
a very sobering — what the French call tour de raison — tour of the 
horizon. I am sure we will have a lot of questions to ask. 

it's shortsighted to cut the intelligence budget now 

I suspect the first thought that comes to mind is that attempts 
by some in the Congress to significantly cut the intelligence budget 
are unbelievably shortsighted. Clearly, the task you and your agen- 
cy have, have become more complex and in many ways far more 
sophisticated in the post-cold war world than during those happy, 
stable times when the Soviet Union was the overwhelming focus of 
our attention. 

Would you care to comment on the budget issue? 

Mr. Woolsey. Mr. Chairman, you served me one at three-quar- 
ter speed right across the middle of the plate. 

Thank you very much. 

I think some people, when they look at the end of the cold war, 
make a very fundamental mistake in assessing intelligence needs. 
They assume that since the risk of a single cataclysmic event, such 
as a nuclear attack by the Soviet Union, or a Soviet invasion of 
Western Europe, is less likely, that that means intelligence is easi- 
er. They also sometimes assume that the intelligence collection sys- 
tems that were highly used until during the cold war are not use- 
ful — many of them are not useful in the post-cold war era. 



16 

Both of those assumptions are flat wrong. The intelligence prob- 
lem presented by the types of issues we were facing today is in 
many ways considerably more complex and difficult to deal with 
than was the problem of tracking the works of Moscow when it was 
the capital of the Soviet Union throughout the world. 

The Soviet Union did a lot of things in a relatively regular way. 
It deployed new ICBM's the same way, tested new systems the 
same way, even infiltrated groups in the Third World the same 
way. 

There is not anywhere near that degree of predictability with re- 
spect to countries such as North Korea, Iran, Iraq, Libya, and so 
on today. 

Many of the — I would say virtually all of the types of intelligence 
collection systems and people who were involved in working the 
cold war are readily adaptable to working what are in many ways 
considerably more complex and difficult problems. We are in tne 
midst of restructuring and reorienting that; fully support the budg- 
et the President sent up to do that, and am very regretful at any 
reductions to it. I am especially regretful, and I think the country 
should be regretful, of any substantial reductions to it. 

IRANIAN ARMS SHIPMENTS TO HEZBOLLAH ARE TRANSITING DAMASCUS 

Mr. Lantos. Mr. Woolsey, we will want to focus on the nuclear 
proliferation issue; but in view of the flare-up of hostilities in the 
Middle East, I think some of us would like to raise some issues 
concerning Syria and its role in this endeavor. 

It is my understanding, 2 weeks ago, on July 15, Syrian armed 
guards stood by at Damascus International Airport as an Iran Air 
747 unloaded antitank rockets and a range of other weapons which 
were promptly trucked off to Lebanon under military escort for use 
by Hezbollah to intensify its attacks on the settlements in the 
north of Israel. 

Hezbollah is what is generally referred to as the party of God, 
although I am unaware of any written permission by the Almighty 
for the use of that term. 

I wonder if you can tell us — because in this arena, hostilities 
have a way of escalating — how many arms shipments have gone 
through Damascus for Hezbollah this year over the past 12 
months? Is there any evidence that Syria is moderating its position 
toward the terrorist gang called Hezbollah? And what is the rela- 
tionship between Syria and Iran in connection with the support of 
state-sponsored terrorism? 

Mr. Woolsey. Mr. Chairman, Hezbollah definitely has a home in 
the Bekaa Valley and its activities as the world's principal inter- 
national terrorist organization are a matter of deep concern. It has 
shown its worldwide reach in a number of circumstances, including 
the attack on the Israeli Embassy in Argentina a year or so ago. 

I can say a word or two about the situation with respect to weap- 
ons of mass destruction in Syria; but I am afraid that the subjects 
that you raised in this most pertinent question are ones we would 
have to talk about in executive session. 

Mr. Lantos. That is fine. 

There clearly is a consensus that Iran is seeking to acquire nu- 
clear weapons and my first question in this connection is which 



17 

countries are providing critical assistance for Iran's nuclear weap- 
ons development program; and what are they supplying? 

Mr. WoOLSEY. Iran's nuclear program is at an early stage; but 
there are signs that it is going to pursue both nuclear weapons and 
atomic energy for power purposes. China has established itself as 
Iran's principal supplier of nuclear technology. Iran purchased a 
electromagnetic isotope separation unit — an EMIS unit it is 
called — from China. This was one of the uranium enrichment tech- 
nologies pursued by Iraq earlier. 

China has also sold Iran a zero power research — or a zero power 
research reactor that could be used as a training model for a pluto- 
nium producing reactor; and Iran is negotiating with Russia and 
China for nuclear power plants. Moscow and Beijing claim that 
these power reactors would be placed under international safe- 
guards. That remains to be seen. We would hope that that would 
be the case. 

ARE WESTERN COMPANIES HELPING IRAN? 

Mr. Lantos. One of the most disturbing aspects of nuclear pro- 
liferation and weapons of mass destruction proliferation that we 
discovered in the years leading up to the Persian Gulf War was the 
sickening complicity of hundreds of Western companies with gov- 
ernmental acquiescence or connivance in building up Iraq's capa- 
bilities in the field of weapons of mass destruction. 

Some of us think, Director Woolsey, that there is a repetition of 
this now with respect to Iran. 

Could you tell us the degree of cooperation you are receiving 
from Western European countries, Japan and other developed 
areas, in attempting to prevent "Rogue Regimes" such as Iran from 
developing their capabilities? 

Mr. Woolsey. Let me mention, first, a word about Germany be- 
cause there is something positive to be said here, Mr. Chairman. 

Germany's strengthened export controls have helped curb the 
flow now of some sensitive weapons-related technologies. There are 
some German firms that almost certainly will continue looking for 
loopholes and pressing to roll back export constraints; but the Ger- 
man Government's new regime is beginning to have an impact. The 
very vigorous German press followed stories about illicit exports 
much more extensively than it did at one time. 

I would say that numerous reports that suggest that there has 
been stricter licensing and enforcement in Germany are hurting 
some weapons acquisition efforts by other developing countries. 

Let me ask Gordon Oehler to add to that with respect to other 
aspects of your question. 

Mr. Oehler. I think all of the developed countries. Western Eu- 
rope and Japan certainly included, are doing what they can to pre- 
vent Iran from developing weapons of mass destruction capabili- 
ties. 

Mr. Lantos. Do you really mean that? When we have just seen — 
having just seen in the New York Times last Sunday the night- 
marish record of what these countries did to help Iraq develop its 
mass weapons capabilities? Are they now doing everything they 
can? 



18 

Mr. Okhijcr. Well, a lot of lessons were learned from the Iraq 
case. In all of these countries — Germany was just mentioned, 
Japan, have put in fairly strict export control laws on those weap- 
ons and technologies that are directly related to weapons of mass 
destruction. 

Mr. Lantos. Are those enforced? Are those laws enforced? 

Mr. Oehler. The enforcement capabilities are not necessarily up 
to the laws. 

Mr. Lanttos. Isn't that the issue? 

Mr. Oehler. That is one of the issues. 

Mr. Lantos. The greatest constitution was the Soviet constitu- 
tion. It just was not observed. They can put on the laws any set 
of conditions and requirements and restrictions. If the enforcement 
capabilities or the willingness to enforce is not present, those are 
useless. 

Mr. Oehler. Yes. And they are improving their enforcement ca- 
pabilities, but they still have a ways to go. All Western countries 
do. 

I would also like to add that there is a problem in the area of 
dual use technologies. Many of these countries do not see the 
same — do not have the same philosophy as the United States does 
on the transfer of dual use technologies. So you see Western Euro- 
pean and Japanese companies much more in Iran now developing 
telecommunications infrastructure, basic industries, and so forth. 
In the view of the United States, that has not been desirable be- 
cause of the fact they may be used for weapons purposes. 

THE clear danger OF DUAL-USE EXPORTS 

Mr. Lantos. Since neither of the Western European countries 
nor Japan have been accused of naivete, how do you explain the 
fact that we clearly understand the fact that dual use technology 
is just as dangerous as nondual use technology, while our friends 
in Europe and Japan use the dual use loophole to export for profit 
purposes items which can be of enormous global danger? 

Mr. Oehler. Yes. That is of great concern, the trade in these 
dual use items. That is where the weak point is. 

Mr. Lantos. Well, your last sentence is sort of totally at variance 
with your very positive earlier statement. Dual use has been the 
loophole that countries and companies which wanted to pretend 
that they would like to prevent the export of weapons of mass de- 
struction to these "Rogue Regimes" have used historically. 

What you are saying is they are still using it? 

Mr. Oehler. No. My first statement, if you look at it complete, 
savs that they are doing what they can to prevent direct weapons 
related technologies flowing to Iran. And that is true. They are not 
allowing the sale of reactors, for example. It was mentioned earlier 
that China has signed a contract or is negotiating with Iran for the 
development of power reactors. Russia is, too. 

Iran would much rather go to Western suppliers. Western suppli- 
ers including Grermany, for example, have refused to complete the 
Iranian nuclear program that was started back in the time of the 
Shah. 

So I think what I am trying to say is that those technologies 
which are directly related to weapons of mass destruction pro- 



19 

grams, such things as precursor chemicals, in the chemical area; 
fermenters and things in biological warfare; the nuclear areas I 
talked about, these countries have really done a pretty good job of 
stopping that. 

Then there is the area of the dual use technologies. That is the 
area of contention. 

Mr. Lantos. Well, I agree with what you are saying; but that 
leaves us with an enormous problem. 

Mr. Oehler. I agree. 

BOEENG SALE TO IRAN 

Mr. Lantos. Let me just take a very simple item. Let me deal 
with the issue of the pending sale of Boeing aircraft to Iran. 

I take it that we use — we would use such aircraft as dual use, 
isn't that true? 

Mr. Oehler. That is correct. 

Mr. Lantos. And the argument, and the argument as to why we 
should sell Boeings to Iran is that if we don't. Airbus will be sold 
to Iran; is that correct? 

Mr. Oehler. You will have to check with the policy folks on that. 

Mr. Lantos. Well, Director Woolsey, isn't that 

Mr. Woolsey. It is certainly an argument, Mr. Chairman. I 
think Dr. Oehler's note of caution is appropriate. This policy issue 
is one that will be decided — as they say in the Navy — above our 
pay grade. 

Mr. Lantos. It may be above your pay grade, but it is not above 
our concern. 

Mr. Woolsey. That is correct. 

Mr. Lantos. Let me deal with it a bit further. 

Am I right in assuming that Airbus could also not be sold be- 
cause it has more than a 20 percent U.S. component if we objected 
and the Europeans accepted that objection? Isn't that true? In a 
technical sense, isn't that true? 

Mr. Oehler. I believe there is some stipulation like that. I can 
say Airbus is working very hard to get the percentage of U.S. com- 
ponents below that limit, whether it is 20 percent or what. So they 
will not be subjected to U.S. controls. 

Mr. Lantos. So the classical statement of Lenin that some cap- 
italists sell the rope to hang themselves is as valid in 1993 as it 
was in the early 1920's? Is that basically what you are saying? 

Mr. Oehijcr. And probably will be true into the year 2000. 

Mr. Lantos. When the World Trade Center blows up, when Iran 
is in the process of acquiring nuclear weapons, when it is now clear 
in retrospect that Iran was much closer to having a nuclear weap- 
ons capability than our intelligence community estimated, what 
more effective measures does our Government need to take to per- 
suade our allies and others to cooperate? 

For instance, it came as a surprise to some that a Swiss firm — 
a Swiss business firm was recently accused of selling nuclear tech- 
nology to Iran; nuclear technology that could be used to develop a 
nuclear weapon. 

Mr. Director, is that newspaper report accurate from where you 
sit? Dr. Oehler? 



20 

Mr. Oehler. I am not able to address that in this forum, unfor- 
tunately, for sources and methods. 

Mr. WoOLSEY. We have to go into that in executive session, Mr. 
Chairman. 

Mr. Lantos. Let me deal a little bit with the question of the dan- 
ger of Russian sales and the movement of highly skilled Russian 
and Soviet personnel to the "Rogue Regimes." 

You mentioned, Director Woolsey, the activities involving Russia 
at the Abu Dhabi arms show. Can you expand on that? 

What if anything are we doing to attempt to persuade the Rus- 
sians that while this may bring them a few rubles, in the short 
run, it is not in their interest to see a world where "Rogue Re- 
gimes" have weapons of mass destruction and the capability of de- 
livering them? 

Mr. Woolsey. May I ask Dr. Oehler to speak to that, if I may. 

Mr. Oehler. The Russians showed quite a wide array of tech- 
nology at that Abu Dhabi fair basically for sale. In the past, the 
Russians were most interested in selling only their overt tech- 
nology outside their own closest nations. What that arms fair 
showed us was that they are interested and willing to sell some of 
their very highest technology and the modification to the scud was 
a very high technology development. 

In terms of are we working to try to persuade the Russians not 
to do that, I think it is fair to say that the administration has ongo- 
ing, continuing — what word you want to use — discussions with the 
Russians on that. On the exact nature of those, their understand- 
ing of the success of them, I think you will have to ask the Depart- 
ment of State. 

"CERS": THE SYRIAN SCIENTIFIC RESEARCH CENTER 

Mr. Lantos. One of the things we learned from Iraq is that these 
"Rog^e Regimes" typically have a very comprehensive system of 
front organizations buying outfits under various names across 
Western Europe and elsewhere, and they use these to take care of 
their shopping and to do it in as sinister and invisible ways as pos- 
sible. I want to ask you a question concerning the Syrian procure- 
ment front. 

There is an organization called the Syrian Scientific Research 
Center which, of course, is a state-run entity reporting directly to 
Asad which has been used for many years as a front for the pur- 
chase of prohibited items in the United States, Germany, France, 
Belgium, the United Kingdom, all necessary for weapons of mass 
destruction programs undertaken by Sjn^ia. 

It has become so notorious under this name, under its French ac- 
ronym, CERS, that I understand both Germany and the United 
States have placed it on a watch list of unacceptable end users so 
that companies will not make the mistake inadvertently of selling 
it useful technology. 

Despite this, we have learned that this procurement firm is func- 
tioning vigorously. Their teams have been visiting large European 
companies just in recent weeks without any attempt by European 
authorities to prevent this from happening. 



21 

I would like to know if we have a strategy of putting this outfit 
out of business and if we work actively with our European and Jap- 
anese and other friends to alert them to this danger, Dr. Oehler? 

Mr. Oehler. One of the unfortunate outcomes of the 1980's when 
Saddam built up his CW procurement network and nobody seemed 
to care at the time, was that he learned a lot of lessons on how 
to set up these diversion networks, how to get around local laws. 
Many of the suppliers in Western Europe and elsewhere also 
learned that lesson and resold that information to these other 
countries such as Syria that you are talking about. 

One of the techniques that is used is to have a legitimate sci- 
entific outfit also get into the business of either fronting for the 
purchase of weapons which are then diverted; and that gets 
around — or at least it did earlier — get around what is called the 
end user part of the license. That is the license application has to 
state where that material is going. If it is going to a standard sci- 
entific company, normally not. 

Mr. Lantos. If you forgive the bad pun, you don't have to be a 
rocket scientist to understand that if in a country like Syria or Iran 
there is a government entity which engages purely in peaceful sci- 
entific research and next door to it there is an entity which is de- 
veloping weapons of mass destruction, that it is not unthinkable 
that items bought for the pure outfit are transferred to the less 
pure outfit? 

Mr. Oehler. No. For sure. 

I want to tell you that CERS, that organization, has been on our 
list for a long while. We watch it very closely. 

Mr. Lantos. Is it on the British list? 

Mr. Oehler. Yes, sir. 

Mr. Lantos. Is it on the French list? 

Mr. Oehler. I hope it is on the watch list. I cannot say specifi- 
cally about the export control list. I can tell you for sure the world 
is very well-informed on CERS activities in a number of different 
areas. 

Does that mean that everybody is going to stop the sale of tech- 
nologies or chemicals or whatever to them? The answer is no. You 
still have that dual use problem where many companies, some 
countries believe that if there is reason to believe that that is going 
to go into a scientific one and it is dual use, then, therefore, they 
are given the economic situation, the suppliers are under — they are 
inclined to let it go. 

I think many of these countries — in answer to your question 
about what we are doing about this, we have advertised around the 
world that CERS is an outfit to watch. We have also done a lot of 
work in trying to understand the diversion networks better and 
trying to get information out faster to these governments so we, as 
an international community, might be able to respond faster. 

You cannot do much about CERS; but you ought to be able to do 
something about the companies that are dealing with them from 
the outside. Often times these are front companies that are set up. 
As you know, if any country sets up a company in the United 
States, that is treated as a U.S. citizen and has certain rights and 
privileges. 



22 

The same is true in Britain, France, everywhere else. So in order 
to be able to ^et inside that time loop where they can set up these 
front companies, create some diversion, get out of business, we 
have to have better intelligence and be able to work this within 
this community faster. That is what we are trying to do. 

Mr. Lantos. Let me just say, in my judgment, your organization 
does a better job of this than any other branch of our Government. 
I hope that the President will use his next summit meeting to per- 
suade the heads of the other participants that there is no more im- 
portant job that they and we have than to prevent the proliferation 
of weapons of mass destruction and they shouldn't close their eyes 
to outrageous activities by private firms and sometimes govern- 
ment agencies in our allies and other friendly nations. 

Congressman Bereuter. 

Mr. Bereuter. Thank you, Mr. Chairman. 

Yesterday, President Clinton sent a letter to Congressman Dan 
Glickman, chairman of the House Select Intelligence Committee, 
and it has been generally made available to members for their use. 
I will quote, first, in preparation for my question. 

"The reductions already proposed by the House Intelligence Com- 
mittee will in themselves test our ability to manage prudently the 
reduction of the Intelligence budget while we simultaneously seek 
to meet the new security challenges which confront our country. 
Therefore, I will oppose any amendment on the House floor which 
seeks to reduce intelligence spending beyond the reductions im- 
posed by the committee. 

'While I appreciate the delicate balance you and your colleagues 
have attempted to strike, I am opposed to further erosion of intel- 
ligence capabilities needed to protect our Nation's security." 

That is the letter of President Clinton from yesterday. Going 
back to Chairman Lantos' first question which related to the budg- 
etary and other difficulties your agency faces and the Intelligence 
Community generally, especially as they relate to proliferation, I 
want to ask you for a little more detail on not only proliferation, 
but terrorism difficulties, state-sponsored and otherwise. What 
kind of difficulties and considerations do they pose for you in a 
budgetary, personnel, and programmatic sense. 

Before, you gave us some of the false assumptions and attempted 
to knock down those. Is there more detail you care to provide us 
and enlarge it also in the area of terrorism if you would, Mr. Direc- 
tor? 

Mr. WOOLSEY. Congressman, the systems and people that were 
engaged in the effort to watch the Soviet Union and learn and ana- 
lyze intelligence from it, and other such targets during the cold war 
era are generally quite adaptable to such jobs as searching the 
Mideast for new underground construction. They are adaptable to 
the job of understanding what we can understand from human in- 
telligence and signals intelligence. 

I would say that the very important jobs of locating and under- 
standing the products that are being shipped in connection with 
proliferation, the networks and people and companies who are in- 
volved in those shipments, and the end use in the sense of facilities 
and weapons in proliferating countries are similar — require similar 
but in many ways somewhat more demanding uses of human intel- 



23 

ligence, imagery, and signals intelligence than was required during 
the cold war. 

What we are trying to do in the Intelligence Community is simul- 
taneously to reorient our intelligence collection and analysis toward 
some of these issues; and at the same time, phase down in size in 
a systematic and planned way much of the reductions that need to 
be taken and can understandably be taken in the Intelligence Com- 
munity. 

I think fewer people having fewer facilities, having frankly fewer 
satellites, have to be planned and managed in a way such that you 
pay some investment at the front end in order to save more re- 
sources and have your resources reoriented 3, 4, 5, 6 years down 
the road. 

If I could use an analogy, one that is not a happy one, I am sure, 
on Capitol Hill, but it is similar somewhat to the base closure prob- 
lem. Virtually no military facility anywhere in the world, overseas 
or in the United States, that is closed down saves money in the 
first year, or second, or third. It usually costs money in the first 
year, two, three. You do it because you are changing the nature of 
your infrastructure and you start seeing savings out a few years in 
the future. 

The President's budget that he submitted to the Congress for in- 
telligence was entirely consistent with his promise during the cam- 
paign that there could be approximately $7 billion in reduction over 
a 5-year period, from 1993 to 1997, in national and tactical intel- 
ligence spending compared with the program that existed last sum- 
mer. 

But that reorientation, that savings over a 5-year period did in- 
volve a small increase in percentage terms from the appropriated 
level that Congress approved last year. 

Our effort with whatever share of that budget Congress ends up 
approving will be to use those funds and to use our planning — con- 
duct a planning in such a way that we do end up saving substan- 
tial resources for the country over the period of the next 5 to 10 
years; but any effort to say that it has to happen suddenly and im- 
mediately not only will mean that it is not done efficiently, it will 
not only mean that it thwarts efforts to save money over the long 
run, but it also could make it substantially harder for us to under- 
stand this proliferation issue, to understand the terrorism issue, 
and to deal with these new and sometimes even potentially linked 
problems of terrorism and weapons of mass destruction that I de- 
scribed. 

I have no ambitions to preside over a larger or more grander In- 
telligence Community in the U.S. Government than the taxpayers 
absolutely need. 

My total interest in that is seeing that the job gets done in a sen- 
sible and reasonable fashion and that we do not miss some of these 
very troubling trends for lack of resources, and because the Presi- 
dent's budget has been cut more for intelligence than is reasonable 
given all the other things the country needs to do. 

Mr. Bereuter. Thank you, Mr. Director. I know it is hard to give 
explicit examples because of the classification difficulties. I think 
that that response will be helpful for public education and for the 



24 

education of members that do not deal with these issues all the 
time. 

I know my colleagues have questions. I would like to ask one 
more, Mr. Chairman, if I may. It is a different subject. 

I would like to ask the Director about the opportunities, the 
progress, the motivation you would see now or prospectively be- 
tween the United States and Russia and perhaps other of the 
former Soviet Republics in dealing with proliferation of weapons of 
mass destruction and terrorism. 

Unfortunately, you were required to give us the bad news about 
the sale of missiles. But beyond that, in looking at the weapons of 
mass destruction, terrorism, what opportunities, what progress do 
you think we might expect, since we would seem to have some of 
the common concerns about terrorism and proliferation? 

Mr. WOOLSEY. These two areas plus narcotics, Congressman Be- 
reuter, are the areas that we are working with the Russian intel- 
ligence service and other intelligence services in the former Soviet 
Union on cooperatively. 

These intelligence relationships are just beginning. They are col- 
legial, but careful; but they do hold out the promise — I would say 
a promise that is directly proportional to the experience that Rus- 
sia and the other former states of the Soviet Union have in moving 
toward being democratic states — for us to combine forces in a way 
that can help make an important dent in this problem. 

The senior levels of the Russian Government, President Yeltsin 
in particular, take this matter very seriously. We are beginning to 
work with Russian intelligence and with the senior leadership of 
the Russian Government on these matters. It is for me personally, 
I might say, a gratifying experience to be able to sit and work 
with — with some of our former adversaries, really in a very cooper- 
ative way on these issues. 

I would hasten to say that it is a beginning. For some of these 
countries, including some of the former Republics, there are prob- 
lems down the line, as I alluded to in my opening statement in 
some of their facilities, some parts of their government bureauc- 
racies in which their attitudes toward proliferation of sometimes 
dual use technologies, sometimes potentially materiel of different 
types is not as positive as that of the — let's say — President Yeltsin 
and the reformers surrounding him. 

So this is a somewhat delicate undertaking, but it is one that we 
have begun. It is one that has begun in some small measure to pay 
some dividends. 

Mr. Bereuter. Thank you. 

Thank you, Mr. Chairman. 

Mr. Lantos. Thank you. 

Congressman Berman. 

Mr. Berman. Thank you very much, Mr. Chairman. 

Good to see the director here. I have a number of questions and 
you have raised a bunch of issues I am very interested in. I don't 
know if in every case you feel you are — I am asking perhaps more 
in your role in nelping to formulate policy as a member of the NSC 
than as a representative of the agency, hoping that that preface 
will allow you to answer questions you otherwise feel it might not 
be appropriate for you to answer. 



25 

NORTH KOREAN WITHDRAWAL FROM NPT 

In your testimony, you talked about your pleasure — I forget the 
exact verb you used— but that the North Koreans had suspended 
their withdrawal from the NPT. Maybe pleasure is a little bit of 
an overstatement. You noted it positively. In reality, what does 
that mean? Iraq never even gave us an intention to withdraw from 
the NPT, but did nothing in terms of what Iraq did, what they 
were trying to produce in the development of a nuclear weapons 
program. 

Why is there any reason to believe that the North Korean action 
is anything other than an effort to placate some of the opposition, 
lessen some of the pressures for the reason they are doing what 
they are doing? 

Mr. WooLSEY. We do not know that it is yet. Congressman Her- 
man. We only know that there may be an opportunity. I tried to 
stress throughout the testimony with respect to North Korea the 
importance of deeds, not words. I think all one can say at this point 
is the discussions are going on and that North Korea's expressed 
interest in moving to light-water reactors and to different types of 
power sources than those that readily produce fissionable material, 
highly enriched uranium, plutonium, is at least something that has 
been viewed positively by the U.S. Government with the appro- 
priate cautious words in its description. 

I am being very careful in what I say about this because the 
talks are going on; and although — as I know you appreciate, I am, 
along with the Chairman of the Joint Chiefs, a statutory adviser 
to the National Security Council. I am not one of the policymaking 
officials who sits on the council. That is really the President, Vice 
President, Secretary of State, and Secretary of Defense. So my role 
is here and there essentially one of trying to understand what is 
going on in the world and advising about what that is as distinct 
from making policy recommendations. 

I don't think one can say anything more than we may, as a result 
of these recent discussions with the North Koreans, have an oppor- 
tunity to see things turn in a more positive direction; but it is the — 
it is actions not words about them that will matter. 

china's commitment to mtcr 

Mr. Herman. You indicated in your testimony that there were 
questions about whether or not China was lixdng up to its commit- 
ment to adhere to the missile technology control regime, the rep- 
resentations they made, I think, several years ago, which were re- 
ported to us by top officials of the previous administration. 

Is there any doubt that they are not adhering to their commit- 
ments they made at that time with respect to proliferation of mis- 
sile technology and missile components that are contained — that 
are constricted by the missile technology control regime? 

Mr. WooLSEY. I think the only thing I can reasonably say in 
open session on this, Congressman Berman — I would be glad to go 
into more detail in executive session — is that we are indeed con- 
cerned with reporting that China transferred M-11 missile tech- 
nology to Pakistan. 



26 

This is right now the central issue. We do continue to monitor 
closely Chinese behavior on this very important subject; but as you 
can imagine, given the importance of this, I thought ahead of time 
rather carefully about exactly what words I would use in open ses- 
sion to describe our current posture. I would appreciate any oppor- 
tunity you want to take for us to examine that either you and me 
together or in executive session. I am quite ready to do that. 

Mr. Berman. I appreciate that. 

FUNDING FOR IAEA 

The IAEA had a number of new duties now. They are heavily in- 
volved in Iraq. They have responsibilities in Argentina, Brazil, 
which they didn't have in the past. There is a lot more work. Why 
isn't the administration requesting a higher level of funding than 
a freeze for this agency given its massively expanded level of du- 
ties, and apparently its higher level of focus on what it was sup- 
posed to have been doing all these years? 

Mr. WooLSEY. Let me ask Dr. Oehler to say a word about the 
funding structure for the IAEA. Being a United Nations entity to 
which we contribute along with other countries, I am temporarily 
at a slight loss to understand precisely how our Government's atti- 
tude toward funding is affected. 

Could you spell that out a little bit? 

Mr. Berman. I was disappointed the administration didn't re- 
quest more money in this year's budget for IAEA. They appealed 
for it. They have many more responsibilities. We want other coun- 
tries to increase their contributions. We are not talking about large 
amounts of dollars here. 

Mr. WooLSEY. You are, of course, way out of my area of respon- 
sibility as Director of Central Intelligence, Congressman Berman. 

Mr. Oehler, do you have a comment? 

Mr. Oehler. I would like to say the IAEA has stepped up its op- 
erations. 

Mr. Berman. Are they doing good work? 

Mr. Oehler. Yes, they are. They are doing good work. They are 
not the end to all of our problems, of course; out they are a very 
important part to the solution. 

Mr. Berman. Do they play an important role in our nonprolifera- 
tion strategy? 

Mr. Oehler. Yes, they do. 

Mr. WooLSEY. I would add our level of intelligence support to 
them, which is really how we come into that picture, has substan- 
tially increased in recent years; the relationship is a positive one. 
Through the Department of State, they have been able to absorb 
and use products of intelligence, I think, in a responsible fashion. 

They have, of course, in the aftermath of the Gulf War, expanded 
their efforts to engage in inspection beyond those declared sites; 
but in terms of policy decisions about levels of funding, you need 
another official up here. 

Mr. Berman. Mr. Chairman, would it be all right if I pursued 
two more areas? 

Mr. Lantos. Well, I will give you one more area. There are sev- 
eral colleagues waiting. The Director has to leave in a few minutes. 

Mr. Berman. All right. 



27 

MISSILE TECHNOLOGY CONTROL REGIME 

I will not pursue the role of advanced conventional weapon trans- 
fers, the extent to which that undercuts our ability to work on non- 
proliferation of weapons of mass destruction. I will pursue, instead, 
a more limited question about MTCR. 

You mentioned Argentina as being invited to be a member of 
MTCR. 

Mr. Oehler. Yes, sir. 

Mr. Berman. Other countries are asked to add here to that? 

Mr. Lantos. MTCR is the Missile Technology Control Regime; 
right? 

Mr. Oehler. That is correct. 

Mr. Berman. Are there some different classes of membership in 
MTCR? What is the defining characteristic that says you are eligi- 
ble for one but not for the other? 

Mr. Oehler. No there are no differences in classes of members. 

I would add a footnote to that in a minute. They are being in- 
vited to join the missile technology control regime. There are a cou- 
ple of hurdles they will be asked to cross before they join, but that 
is expected to be sometime soon. 

The footnote is that China has agreed to adhere to the guidelines 
and parameters of the MTCR, but they are not and are not ex- 
pected to become members of the MTCR. 

Mr. Berman. They are not being invited to become members? 

Mr, Oehler. I don't know whether they have be asked. But I 
don't think they would, if asked. I think their decision is to abide 
by the guidelines and parameters. 

Mr. Berman. What is it that we expect of countries that would 
be allowed to become members of the MTCR? 

Mr. Oehler. Basically, we expect countries that do not have bal- 
listic missiles not to develop ballistic missiles. 

Mr. Berman. What about countries that have an indigenous bal- 
listic missile manufacturing capability? 

Mr. Oehler. I believe they are not to bring in outside technology 
for that. I am not so sure about those programs. 

Mr. Berman. Even though the British and the French and us, we 
exchange information and technologies in this area. 

Mr. Oehler. I haven't really looked at the British and the 
French and U.S. relationship and how that relates to it. Most of my 
efforts have been focused on preventing other countries from get- 
ting ballistic missile programs. 

Mr. Lanttos. Congressman Smith. 

weapons stockpiling en latin AMERICA 

Mr. Smith of New Jersey. Mr. Director, the May 23 explosion in 
Santa Rosa, in Nicaragua, was but another wake-up call that the 
Sandinistas continue to exert an enormous influence over both pol- 
icy and ongoing events in Nicaragua. As we know, notwithstanding 
the election of Violetta Chamorro, the Sandinistas continue to own 
the army and intelligence functions of that country; and when the 
vault exploded, it revealed and exposed a substantial cache of 
weapons, including surface-to-air missiles, passports and falsified 



28 

government documents, extensive hit-lists, evidence of direct links 
to a myriad of terrorist organizations from the PLO to the ETA. 

And there were some — there is a circumstantial link, at least, to 
the World Trade Center with the discovery of five Nicaraguan pass- 
ports. One diplomat described this cache as a one-stop shop terror- 
ist operation where you get all the documents and weapons you 
could dream of. That juxtaposed with such events as Daniel 
Ortega's flights and frequent trips to countries like Libya, like 
Iraq — he went to Libya twice, I understand, over the last year. 

A moment ago you testified on the importance of getting the job 
done, you don't want to miss very troubling trends for lack of re- 
sources. Do we have any sense that a dangerous stockpiling on be- 
half of the MFLN was occurring? Were we or should we have been 
aware of existence of this cache and perhaps of others; and is this 
the tip of iceberg, and are there sufficient numbers of CIA assets 
focused on this part of the world? 

Mr. WooLSEY. I would say, first of all, this is an important issue, 
but somewhat afield from weapons of mass destruction. And one of 
the things 

Mr. Smith of New Jersey. You did testify about the concern, al- 
though there is no evidence that terrorist groups have acquired 
such weapons, certainly the possibility exists; and when the head 
of a political party, Daniel Ortega, is making these kinds of trips 
to countries that are in that network, there certainly is a link. 

Mr. WooLSEY. I would say we have no evidence at this point that 
terrorist groups are in fact yet acquiring weapons of mass destruc- 
tion. I would say that of the terrorist groups that I would be most 
concerned about, in that — to put on a sort of — a watching brief on 
for those purposes, it would tend to be those that are affiliated with 
or housed in regimes that themselves are involved with weapons of 
mass destruction. Much of that is in the Mideast rather than in 
Latin America. 

But the subject of terrorism in Latin America, including the 
kidnappings that have been right at the heart of much of Latin 
American terrorism in recent years — and that, as you perhaps 
noted, was involved in some or the material in the Nicaraguan 
bunker — are very important issues. But in order to address those 
carefully, I really need to have one or two people who watch such 
matters as Latin American terrorism, perhaps from our 
counterterrorist center, with me, and would be glad to meet with 
you and go over it. 

What I am really able to discuss effectively, I think especially in 
a public session this morning, is essentially the chemical, bacterio- 
logical, nuclear weapons, ballistic missiles and their interaction 
with countries where they are being proliferated. So I think prob- 
ably this morning I don't have much more to add on that particular 
point. 

Mr. Smith of New Jersey. I would like to meet further and — if 
you could answer those questions for the record. 

Mr. WooLSEY. For the public record, there may not be a great 
deal more that we could say; but for executive session with this 
committee or in some kind of classified session, we will be glad to 
arrange with the chairman to see to it that the question gets an- 
swered. 



29 

china's nuclear cooperation agreement with IRAN 

Mr. Smith of New Jersey. One final question. The Iranian par- 
liament recently ratified, as you know, a nuclear cooperation agree- 
ment with China which seems to be geared toward — or they say — 
to civilian nuclear research. Could you elaborate on the issue of 
China's nuclear cooperation with Iran, your evaluation of how Chi- 
nese technology might aid Iran's nuclear weapons program? 

Mr. Woolsey. I think I can say a word on that and then I will 
turn it over to Mr. Oehler or Mr. Gershwin to follow up. 

I mentioned earlier the electromagnetic isotope separation unit 
and the sale by China to Iran and the fact that this was one of the 
technologies that Iraq had pursued back before the Gulf War. 

There was also in September of last year, signed between the two 
countries, between China and Iran, an agreement to cooperate in 
developing peaceful applications for nuclear energy. They are ap- 
parently also negotiating the purchase of these two Chinese 300- 
megawatt nuclear power reactors. The Chinese at this point state 
that those would in Iran be placed under international safeguards. 

What worries us principally here is Iran's very dubious commit- 
ment to the nonproliferation treaty and the fact that, quite apart 
from any material in these reactors, which are, if safeguarded, per- 
haps not the most important point; it is the overall training and 
level of expertise and improvement in skills with respect to dealing 
with fissionable materials and reactors that would be supplied to 
Iran that could of course be transferred in some sense to a nuclear 
weapons program. 

Beyond that, let me see if either Gordon Oehler or — you are 
probably the one on this. 

Mr. Oehler. As was stated in the testimony, Iran's nuclear pro- 
gram is still fairly early. In any country's early stage of develop- 
ment, one must develop a basic nuclear infrastructure. That infra- 
structure can be used both for peaceful and for weapons purposes. 
Iran — China has been the supplier of much of that technology and 
material to build Iran's basic nuclear infrastructure. 

Iran and China both say that that is to be used only in a civilian 
nuclear power program or for peaceful purposes. 

Mr. Lantos. Has any nation ever said that these programs are 
used to develop nuclear weapons? 

Mr. Oehler. No. That is what makes the whole question of dual 
use possible. 

We have good information that Iran has nuclear weapons inten- 
tions, so we therefore expect that much of this material or the ex- 
pertise that is transferred as part of these programs will find its 
way into a weapons program. 

Mr. Smith of New Jersey. When you say it is in the "early stage," 
how long until it comes to fruition? 

Mr. Oehler. We estimate another 8 to 10 years, given roughly 
the level of progress they have made to date. 

Mr. Smith of New Jersey. Even with a heavy dosage of Chinese 
physicists being in the country, providing technical data and help? 

Mr. Oehler. They have been there basically for the basic nuclear 
infrastructure, as I have stated. There is no evidence to date that 
they have been involved in the direct weapons-related part. It is a 



nc A'^c r\ 



30 

small effort so far to determine, for example, whether to go the en- 
riched uranium route or the plutonium route. When the part that 
is directly weapons-related gets going further, how much is the 
Chinese involvement — we have no evidence of that, but most of us 
would be surprised if they would be directly involved in the weap- 
ons part. 

Mr. Gershwin. I wanted to add to that that if all foreign assist- 
ance to the Iranian nuclear program were eliminated, which means 
no cooperation with nuclear reactors and whatever, it would un- 
doubtedly prolong significantly the amount of time it would take 
for Iran to develop nuclear weapons. Even though the support that 
is taking place is not directly related to the nuclear weapons pro- 
gram, it builds up the infrastructure and gives them a lot of boost 
and capability to take these people and capabilities and spread 
them into the nuclear weapons program. Without that assistance, 
it is much more difficult for them. 

Mr. Smith of New Jersey. Besides China, who else is involved? 

Mr. Gershwin. They are the key ones. We are going to watch 
North Korea, Pakistan — although I don't think there is a lot of con- 
cern there at the moment — Russia. Things are available. 

Mr. Smith of New Jersey. Thank you. 

Mr. Lantos. Congressman Faleomavaega. 

Mr. Faleomavaega. Thank you, Mr. Chairman. 

Mr. Woolsey, in the aftermath of the Tiananmen Square fiasco — 
and we had our Ambassador here at a hearing in the committee, 
in terms of trying to find out if our Embassy officials were aware 
that there was going to be a real problem here dealing with a dem- 
onstration that took place in Beijing, at this time. I recall there 
were reports that the intelligence community had believed — and 
President Bush — to the effect that Deng Xiaoping was totally inca- 
pacitated, and CNN showed Deng Xiaoping shaking hands with ev- 
erybody. 

effectiveness of the intelligence community 

I wanted to ask you, on a scale of 1 to 10, in your opinion do you 
think that our intelligence community is really up to par, knowing 
what we should be doing? Given whatever the guidelines and the 
rules of law that they are to abide by, do you believe that we are 
now really doing an excellent job, in your best judgment, as far as 
an intelligence agency? 

Mr, Woolsey. Congressman, I have been around intelligence is- 
sues for the last quarter century in Washington. I started out 25 
years ago in the Pentagon as a lieutenant, analyzing remotely pi- 
loted vehicles and satellites for an organization that — whose name 
was only made public last October, the National Reconnaissance 
Of^ce. I have been a consumer of intelligence in several govern- 
ment jobs in the Navy Department and as a negotiator. I managed 
Naval Intelligence for 3 years when I was Under Secretary of the 
Navy. So I have, I suppose, some background and experience in 
looking at the intelligence community from the outside, up until 6 
months ago when I took over this job. 

One of the things that I asked to be done, I have charged the 
new chairman of the National Intelligence Council, Joe Nye, 
brought down from Harvard, to set up some systems to have a real- 



31 

ly very thorough look at the history of intelHgence estimates and 
which ones the community had been right on, which ones wrong, 
if wrong why; and we are sort of in the middle of going through 
that right now. 

I can give you an impression as someone who was an outsider 
until the beginning of February, and has then been in this job since 
then. My impression is that during the cold war our analysis of and 
understanding of the military hardware and military developments 
of the Soviet Union were really first-rate. And as a negotiator, I 
saw this both in strategic weapons and in conventional weapons. 
What was produced by the intelligence community was useful to 
me not only in a long-range planning sense but also immediate 
feedback for what I should say and how I should say it in my lunch 
tomorrow with the Soviet Ambassador. So as an individual I am 
a — ^have been a very satisfied consumer of intelligence. 

I would say that, looking back over the events toward the end 
of the cold war — and for part of this time, beginning in November 
of 1989, I was inside the government — the intelligence community's 
assessments of what was happening in Eastern Europe and the So- 
viet Union politically were, I think, during that period and the pe- 
riods just before, on the whole considerably better than what was 
being said in the outside world. 

One thing that I think was not altogether well understood was 
the fi^agility of the Soviet economy and the relative underlying 
weakness of the Soviet economy. I think that the politics of what 
was happening with the dissident groups and what was happening 
in Eastern Europe was reasonably well perceived. 

During, also, that same period estimates with respect to what 
was going to happen in the former Yugoslavia, when Yugoslavia 
broke up, were much more accurate and way ahead of what was 
being said, for example, by knowledgeable, informed people in pub- 
lic, in the media, and the like. 

Assessment with respect to, politically, what has now taken place 
in Japan over the course of the last few months has been first-rate. 

Mr. Faleomavaega. On a scale of 1 to 10, 1 being the best and 
10 the worst, give me your best shot. 

Mr, WOOLSEY. Impressionistically, you are a champ in the major 
leagues when you strike out twice and get a hit one-third of the 
time when you are at the plate; I think the intelligence community 
on the whole is twice that good. 

Mr. Faleomavaega. That is obvious in some circles, because I 
understand the intelligence community has given the proper infor- 
mation to our policymakers, but our policymakers decided not to 
accept it. 

Mr. WooLSEY. That has happened. My experience personally 
over the course of the last several months is that senior levels of 
this administration and also in the Congress have been extremely 
receptive 

Mr. Faleomavaega. Would you say that China played a critical 
role in getting North Korea to get them on the table to negotiate 
their recent action by getting them out of the NPT? 

Mr. WooLSEY. I wouldn't say critical, but I would say helpful. 

Mr. Faleomavaega. I know, Mr. Chairman there are other mem- 
bers. Thank you very much. 



32 

Mr. LA>rros. Congressman McCloskey. 

THE BALKANS 

Mr. McClx)SKEY. Thank you, Mr. Chairman. I commend Con- 
gressman Faleomavaega for his statement there, and it anticipates 
one thing I do want to say, Mr. Woolsey, in that really the analysis 
of your Balkan intelligence team that I have received over the last 
2 years has been tremendous, outstanding, A-plus, beyond 
perfection 

Mr. Lantos. Would you say something kind about it? 

Mr. McCloskey [continuing]. But the problem is that Mr. Ber- 
man anticipates that also. It has not impacted policy so far in ei- 
ther administration and whatever your function is with the Na- 
tional Security Council and with a Bosnia meeting going on today. 
And as I learned this morning, the French foreign minister coming 
in today, I would beg, implore and entreat you to lay out on the 
table to everyone concerned the work of your team. 

Obviously, we all know what has happened and what the failures 
have been. Tell that group the analysis of your team as to con- 
sequences in the Balkans, given various actions or lack of them; I 
think that would do the job. 

Mr. Woolsey. Thank you for the kind words. We have been inti- 
mately involved all the way up and down the line in assessments 
during consideration of the Balkans of these very difficult prob- 
lems; and this is, as the Secretary of State has said, just about the 
hardest foreign policy problem I have ever seen. But we have called 
them the way we see them and will continue to do so. 

Mr, McCloskey. Two fairly forthright questions, one as to the 
Balkans and one as to nuclear and other nonproliferation problems 
coming out of Russia. 

Could you comment on terrorism, nuclear, chemical or biological 
weapons threat that might be posed by Milosevic? Has there been 
a team working on that? 

Mr. Woolsey. We look at potential terrorist developments com- 
ing out of that part of the world very carefully, and there is noth- 
ing at this point that would involve any weapons of mass destruc- 
tion. 

Mr. McCloskey. I could go further, but in the interests of time, 
I will not. 

scientific emigration out of CIS 

In your statement, turning to the Soviet Union, you say you con- 
tinue to receive reports of a brain drain from the former Soviet 
Union. Delays in pay, deteriorating working conditions, and uncer- 
tain futures are apparently spurring Russian specialists to seek 
emigration despite official restrictions on such travel. We treat 
each of these reports seriously and attempt to determine the verac- 
ity of each. 

In a previous appearance I and other members asked you to as- 
certain instances of success or completion in such proliferation ef- 
forts. Staff informs us today of something I wasn't aware of. 

I guess some time back there were 64 Russian nuclear and mis- 
sile technicians apprehended on a plane leaving Moscow for North 
Korea. I guess some reading of fiction I am doing recently, particu- 



33 

larly The Night Manager, would seem to imply there is an orga- 
nized trade for example with personnel and placement agencies 
working in such areas. 

Given all the interest and given, I think, the horrible economic 
and incentive repercussions of the Russian economic policy of the 
last 2 days, which says you have no economic future or stability 
here if you worked and tried to care for your family, what can you 
say about — where has the problem gone to now? 

Surely there have been successful efforts at breakout on this. 
Can you tell us anything on that? 

Mr. WOOLSEY. We have been watching this issue very closely, 
Congressman, and at this point it appears that most — not all, but 
most scientific emigration out of the Russia and the other CIS 
states has involved experts in basic scientific disciplines — math, 
physics, computer science — who are looking for jobs where they can 
be paid more than they are paid at home in industry and edu- 
cation. Much of that emigration has been to the West. 

Experts of that type are not really likely, although it is possible 
that they have had direct experience and expertise with weapons 
of mass destruction. Frequently this is not the case and even very 
distinguished Russian scientists — who are very good, by the way, 
in the basic sciences — have not really been involved with weapons 
programs. And when one hears some of the high percentages, such 
as — I think there was a Moscow media television report last winter 
that said more than 9 percent of Russia's scientists have left the 
country; we don't know that that number is true, but insofar as 
something close to it would be accurate, a substantial share of 
those, I think, would be these basic scientists we are talking about. 

As far as weapons-related scientists are concerned, the country 
that is probably most aggressively recruiting CIS scientists to help 
with a wide number of weapons programs is China, so there is a 
substantial movement along those lines. And other countries that 
have been trying to hire Russian and other CIS scientists, such as 
Iraq, North Korea, India and Pakistan, some of these reports we 
believe may be unfounded rumors or allegations that are intended 
to discredit the recruiting, the alleged recruiting countries. 

But, nonetheless, there has been some movement of Russian 
weapons-related scientists. It is something that we think is a seri- 
ous matter, that we need to maintain a very careful watch on; and 
I think perhaps I can ask Dr. Oehler 

Mr. McCloskey. Where can you ascertain that they have landed 
as far as reasonable knowledge, rather than just reports? 

Mr. Oehler. Reasonable knowledge, where have 

Mr. McCloskey. Russian or Soviet area scientists been landing, 
the ones that have gone — ^beyond reports. 

Mr. WooLSEY. More heavily China than other countries. 

Mr. McCloskey. North Korea, Iraq? 

Mr. Oehler. Not so much those two, but there is evidence the 
North Koreans would like to have them, but the Russians are un- 
willing to go. 

They have expanded in recent years their nuclear cooperation 
with Libya. In late 1980's, that dipped due to problems between the 
Libyan and Russian Governments. That has been expanded some; 



34 

these are under IAEA auspices. And Iran is a big worry, too, with 
the nuclear cooperation agreement. 

Mr. Lantos. Would the gentleman yield? 

As you know, one citizen by the name of George Soros gave $100 
million to the Russian Government to encourage scientists to re- 
main in Russia. Have there been any other attempts by founda- 
tions, individuals, governments, to undertake a coordinated effort? 
It seems to me that this is an enormously important and creative 
avenue, and I have not seen much else except this lone and bold 
undertaking. 

Mr. WooLSEY. Mr. Chairman, some of the Nunn-Lugar funding 
is relevant here, but I think we probably need to get you an answer 
from someone in the government who watches what the United 
States does. 

Mr. Lantos. Congressman Ackerman. 

Mr. Ackerman. Thank you very much, Mr. Chairman. 

Thank you, Mr. Director, for being with us today. Mr. Director, 
in your statement early on you spoke of nuclear threat from North 
Korea, and as a preamble to that almost, you describe the possibili- 
ties of the development of the missile, currently the subject of 
much scrutiny vis-a-vis the North, as having the possible capabili- 
ties of reaching from North Korea to Japan, reaching from Iran to 
Israel, and reaching from Libya to our bases and capitals in the 
Mediterranean region. 

Is that part of your statement just to give us a sense of mileage 
capabilities expressed on the globe rather than in feet, miles or me- 
ters; or is there something additional that you are trying to tell us? 

Mr. WooLSEY. It is really the former, Congressman Ackerman. 
The range of the No Dong is — the North Korean missile is in excess 
of 1,000 kilometers, and if you just do 1,000-plus kilometer arc 
from those three countries, one would simply note that some inter- 
esting areas that are brought under that potentially lethal um- 
brella are Japan from North Korea, Israel from Iran and much of 
southern Europe, and the rest of the Mediterranean from Libya. 

But I wasn't trying to communicate anything about any imme- 
diate intentions to launch or anything like that. 

Mr. Ackerman. Thank you. 

THE business OF NUCLEAR WEAPONRY 

You spent a considerable amount of time, and I think rightfully 
so, in your statement concerning sale and potential sale, the busi- 
ness of nuclear weaponry. What portion of the economy of the coun- 
tries that are doing the selling are involved in this trafficking? Is 
this a big part of North Korea's business, for example? 

Mr. WooLSEY. Let me ask Dr. Oehler to address that. The prin- 
cipal problem for some of these countries, in particular North 
Korea, is hard currency; and ballistic missiles and, potentially, nu- 
clear materials, whereas it might not be a huge share of their over- 
all economy, it could well be a very substantial share of their hard 
currency earnings. 

Mr. Oehler. In fact, during the Iran-Iraq War, North Korea sold 
a lot of armaments to both sides and made a lot of hard currency 
earnings. Since that war stopped, they have been hard up for hard 
currency earnings, and ballistic missile sales is one of the few 



35 

items that is marketable, because international sanctions have 
stopped much of the transfer of other technologies. 

I think that these hard currency earnings go directly back into 
the military and not into the general economy. 

Mr. ACKERMAN. I know it is not your field or mandate, but it im- 
mediately raises a question in the minds of some that, from a pol- 
icy point of view, the implications of what you are saying might 
seem to indicate that, indeed, regimes such as North Korea starv- 
ing for hard currency and under restraints from the rest of the 
world within the area of trade, not being able to have access to 
hard currency, are almost pushed into a position to trade whatever 
it is they have to trade in order to get hard currency. 

I don't know that you answered this question, but should policy- 
makers be examining the position that we wind up maybe inad- 
vertently placing such regimes in by international trade sanctions? 

Mr. WOOLSEY. It is hard to say in any general terms, I think, 
Congressman Ackerman, what may bear upon the minds of leaders 
in some of these countries, what balance of sanctions and offered 
improvement and cooperation is the right balance in order to en- 
courage them to take positive steps. 

We — as you sort of implied in your question, we are really in the 
business of pointing out in the case of these foreign countries their 
capabilities and the intentions, as far as we know them, of the 
leaders and their vulnerabilities. At that point, we kind of step 
back, and the Secretary of State, the Secretary of Defense, the 
President sort of decide now to balance these things. 

But I think your question in terms of implying there is a full 
scope of behavior that may be encouraged by diflFerent types of in- 
centives is right on. 

Mr. Ackerman. Thank you for that. It seems to me that des- 
perate people sell their bodies and desperate nations sometimes 
sell their souls. I think one of the things that we as policymakers 
should be taking a look at is sometimes the well-intentioned moti- 
vations of our policies may force those with whom we deal into po- 
sitions that we are trying to avoid. 

Mr. WooLSEY. I don't want to get into the Secretary of State's 
business here, but I would say that the recent statement follow- 
ing — public statement following the U.S. negotiations with the 
North Koreans indicates that very much on the minds of the nego- 
tiators and of the State Department in that circumstance was try- 
ing to strike some kind of balance in holding forth a positive future 
to North Korea if it took one route and a negative one if it took 
the other. 

Mr. Ackerman. I think that that is one of the bright lights that 
we are looking at through this muck and mire that is pretty much 
in the distance. 

SALE OF WEAPONS TO TERRORIST GROUPS 

Could you enlighten us as to whether or not there are any terror- 
ist groups — and I know the focus of the chairman's hearing is on 
rogue regimes, but those groups that are not regimes, but are in- 
deed terrorist organizations that function within nations and 
extraterritorially as well; are there interlocking directorates be- 
tween some of these terrorist groups? Are there presently any na- 



36 

tions, individuals or entities selling weapons of nuclear or chemical 
or biological dimensions to any terrorist groups or individuals asso- 
ciated with terrorist organizations? 

Mr. Wooi^EY. With respect to interlocking arrangements, yes, 
there are between some, particularly in a single region that serve 
similar ideological purposes. To get the details of that, I need to 
have our counterterrorism center come and go through it with you. 

But we know of no sales at this point of nuclear, chemical or bac- 
teriological weapons to terrorist groups. 

What led me to make the statement that I did in my opening 
statement is that some of these weapons are considerably easier to 
work with, transport and even manufacture than nuclear weapons, 
and some of these groups are quite close to, influenced by and ex- 
tremely friendly with some of these regimes, particularly in the 
Mideast, that have been involved in weapons proliferation. So I 
think it is part of our job in the intelligence community not just 
to mention to you and to the public matters on which we have hard 
evidence that X is happening, but rather when we see some very 
dangerous conditions beginning to arise, such as that coincidence 
of interest and that coincidence of location between terrorism and 
weapons of mass destruction, that we give the U.S. Government 
and the people of the United States, insofar as we can publicly, a 
heads-up, so to speak, this is something we are now taking very 
seriously. 

ARMS RACE BETWEEN INDIA AND PAKISTAN 

Mr. ACKERMAN. Thank you. Lastly, if I may Mr. Chairman, in 
speaking about the situation in India and Pakistan, you seem al- 
most to indicate that it is not just a possibility but almost likely 
that, if left alone, there exists a strong possibility for some kind of 
nuclear confrontation, an arms race building up between those two 
countries; and I think in reading your statement, as well as in lis- 
tening to you, it seems that that is the only region of the world 
where you indicated that indeed it was an arms race, although 
there are probably other places as well. You did single that out. 

The sale as we have seen it in the press by China to Pakistan 
of M-11 missiles, is that something that we should take very, very 
seriously or something that iust bears a little bit of scrutiny? How 
dangerous indeed is that and of what kind of magnitude? 

Mr. WOOLSEY. Congressman Ackerman, let me again use only 
very carefully chosen words with respect to the M-11 sale, which 
is that we are concerned with reports that indicate that China has 
transferred M-11 missile-related equipment to Pakistan — and 
again, I can go into this more in executive session or in private 
with you if you want. 

The reason I singled out India and Pakistan is because there is 
a dynamic to that. 

So that arms race that has been going on for some time, and it 
is a dynamic that indicates to us that both sides are really making 
extraordinary efforts to — in terms of the sacrifice they are calling 
on their people to make economically and the rest — to have usable 
nuclear weapons. 

Now, it is not a race in the sense that both sides are trying to 
rapidly increase the size of their arsenals, but each of those two 



37 

countries does regard the other as its main security threat. Each 
has developed nuclear capabilities, and the level of hostility be- 
tween the two countries does not seem to be abating. So it is not 
so much that there is some particular recent occurrence that would 
lead us after the fashion of the clock that for years was on the 
cover of the Bulletin of Atomic Scientists getting closer to H hour; 
it is not that I am moving the hand of the clock up several more 
minutes; it is more that this is a chronic condition between two 
countries that are at very serious odds with one another with very 
sophisticated nuclear capabilities, and one doesn't really at this 

Eoint see an end to it. And that, in many ways, is its most trou- 
ling feature. 

I don't want to suggest that there is an event that has occurred 
within the last year or two which puts us into a flash situation or 
a flash warning of some kind with respect to the subcontinent. 

Mr. AcKERMAN. You just stated, I believe, that both sides have 
sophisticated nuclear capabilities. Are both sides able to respond to 
a first strike from the other? 

Mr. WooLSEY. It would depend on their state of readiness. We 
believe that both sides are capable of assembling a number of nu- 
clear weapons in relatively short order. 

Mr, AcKERMAN. Does that include delivery? 

Mr. WooLSEY. Both sides have weapons that can be delivered by 
aircraft so, yes, assemble and deliver within a relatively short time, 
either country could. 

Mr. AcKERMAN. Perhaps, Mr. Chairman, that could be the sub- 
ject for a briefing in a different forum. 

Mr. Lantos. We have an endless number of topics. 

If you have one more minute, I promised my friend from Califor- 
nia that he may ask his second question if he would like to. 

Mr. Berman. I thank you very much, Mr. Chairman, and I just 
have to comment with regard to your response to Mr. McCloskey's 
questions. Periodically we get briefings from the CIA on develop- 
ments in Iraq in the area of missiles, missile development and 
other weapons of mass destruction, what is going on; and since 
every bit of that has now been in the newspapers a thousand times, 
I think it is fair to say that when you listened to the briefings of 
the agency about what was happening in Iraq and you looked at 
our policy at the time toward Iraq, it was the most incredible dis- 
connect between what you were hearing from the Agency and what 
was going on in policy. 

So there is an interesting relationship there which, I guess you 
are the person who is supposed to bridge that now and have some 
impact. 

U.S. NONPROLIFERATION EFFORTS 

My question is for your evaluation of the extent to which our 
nonproliferation efforts are undercut by our own growing role as 
the — by a ratio of 6, 8 and I think coming up to a 10-to-l transfer 
of military weaponry — conventional, but much of it very sophisti- 
cated and advanced, of an offensive nature to other countries; and 
to what extent that becomes a problem when you deal with the 
Russians and the Chinese and the Argentinians and the Pakistanis 
and everybody else in the proliferation area. 



38 

You are not in charge of dealing with them, but perhaps you or 
the gentleman who is focused on missile proliferation — I don't re- 
member your name — could speak to what extent that has any role 
in undercutting the efficacy of our efforts? 

Mr. WOOLSEY. Let me say one word, and then I will turn it over 
to Dr. Oehler. I think most countries around the world including 
those who profess not to understand that there is a reasonably 
clear line — and it is memorialized by these international agree- 
ments and regimes— between supplying these three types of weap- 
ons of mass destruction, or components for them, or ballistic mis- 
siles of the range that would be constrained by the missile tech- 
nology controlling regime, those types of activities on the one hand 
versus selling conventional military hardware on the other. 

Mr. Berman. I agree. But take just the missile part of that and 
just with advanced offensive-capable bombers and sophisticated 
bombers and fighters, do you think the rest of the world accepts 
that distinction, it is OK to trade in one and not in the other? 

Mr. WooLSEY. There are certainly countries that will profess not 
to accept it, but for ballistic missiles of a sufficient range for which 
there really is not a good defense today compared with aircraft, in 
which at least there is a worldwide effort, including sales by all 
sorts of countries, of very sophisticated air defense hardware, there 
is at least a sort of two-sided military effort or race that goes on 
with respect to aircraft and systems to counter aircraft. 

The real problem with a country such as Iran, let's say, having 
1,000-kilometer-plus ballistic missile is that that can put countries 
at risk that can't do anything to deal with it, at least not in the 
short run. 

There are answers to ballistic missile defense and so on, which 
are expensive and still in a relative early stage. I think for ballistic 
missiles it is the virtually free passage aspect of them, the fact that 
a country such as Iran or Iraq, if it had missiles of sufficient range, 
could almost guarantee to the world that they would get through 
to their targets, that creates the very serious concern. If they had 
to fly through the air defenses of Saudi Arabia or Israel or what- 
ever country they might threaten, something might get through, 
but the countries that are friendly to the United States in that part 
of the world at least have defenses against aircraft. 

Mr. Lantos. Mr. Director, on behalf of the subcommittee I want 
to express my appreciation both to you and to your associates for 
an extremely illuminating session. We hope to have you back be- 
fore long. 

This session is adjourned. 

Mr. WoOLSEY. Thank you, Mr. Chairman. 

[Whereupon, at 12:30 p.m., the subcommittee was adjourned.] 



U.S. SECURITY POLICY TOWARD ROGUE 

REGIMES 



TUESDAY, SEPTEMBER 14, 1993 

House of Representatives, 
Committee on Foreign Affairs, 
Subcommittee on International Security, 
International Organizations and Human Rights, 

Washington, DC. 

The subcommittee met, pursuant to call, at 3:14 p.m. in room 
2200, Rayburn House Office Building, Hon. Tom Lantos (chairman 
of the subcommittee) presiding. 

Mr. Lantos. The Subcommittee on International Security, Inter- 
national Organizations and Human Rights will come to order. 

I first would like to apologize to everyone. We have been on the 
floor involved with a series of votes which simply could not be 
helped, and that accounts for the delay beginning. I also want to 
thank Ken Timmerman and Bob King of the subcommittee staff for 
helping with the preparation of this hearing. 

This town is still basking in the afterglow of yesterday's historic 
and symbolic breakthroughs. And what we are engaged in this 
afternoon is a reality check as we look at U.S. security policy as 
they relate to rogue regimes. 

Todav we will be dealing with weapons acquisition and supplier 
networks of rogue regimes. 

As we consider the military capabilities and the support net- 
works of these nations, which, by their very actions, have earned 
a place in the State Department's list of countries supporting inter- 
national terrorism, and which pose a distinct, although not always 
a direct, security threat to the United States. 

In June, this subcommittee released a study of Iraq's research 
and military potential. That study showed that despite the most 
draconian regime of international sanctions ever imposed on a na- 
tion since the end of the Second World War, Iraq has managed to 
rebuild some 80 percent of its military manufacturing capability. 

The Iraqi example teaches us that we need to focus greater at- 
tention on the efforts of these governments to acquire huge arse- 
nals and manufacturing capabilities for conventional weapons and 
we must focus on the sale of dual use technology if we want to slow 
down the proliferation of weapons of mass destruction. 

wmd programs 

Let me say a few words about weapons of mass destruction and 
rogue regimes. 

(39) 



40 

All of the rogue regimes under discussion, Iran, Syria, Libya, and 
North Korea, are building a broad range of weapons of mass de- 
struction, nuclear, biological, and chemical weapons. 

Frequently these countries are helping one another out, forming 
a sort of international rogues gallery of would-be mass murderers. 
North Korea may have enough plutonium for the bomb, and it con- 
tinues to defy the International Atomic Energy Agency which is 
seeking to inspect its suspected nuclear weapons sites. 

Nortn Korea has become the foremost rogue supplier to other 
renegade states exporting nuclear capable missile systems through- 
out the Middle East. Most of its production capability has come 
from China, the former Soviet Union, and Japan. In one instance, 
which has come to our attention, it was actually an organ of the 
United Nations, the United Nations Industrial Development Orga- 
nization that assisted in the construction of a plant by Western 
electronics manufacturers in 1987. That plant today supplies com- 
puter chips and guidance equipment used in North Korea ballistic 
missile systems. 

Libya is building yet another chemical weapons plant at Tarhuna 
with the assistance of companies in Switzerland, Austria, and Ger- 
many. They are building this plant underground where our sat- 
ellites cannot observe it as they did the plant at Rabta. 

According to a British newspaper report, another new plant is 
under way new near Benghazi to produce precursor chemicals for 
the Tarhuna poison gas works. This plant is disguised as an exten- 
sion of a liquid petroleum products plant and includes a production 
line capable of turning out more than 100 tons per year of a special 
alcohol used in making the nerve agent soman. 

The main legitimate use of this alcohol is in the production of 
perfumes, not a booming industry in Qadhafi's Libya. Indeed, the 
entire world's perfume industry consumes only about 20 tons of it 
per year, and Libya wants to make five times that amount, perhaps 
to disguise the bad odor of the Qadhafi regime. 

Syria has been a chemical weapons state for most of the past 10 
years and is now believed to have several small facilities actively 
producing nerve gas and biological warfare agents. Many of these 
are disguised as state-run pharmaceutical plants. Major pharma- 
ceutical companies in Germany, France, the Netherlands, and Brit- 
ain have supplied chemicals and production equipment in recent 
years. From China, Syria is receiving extensive assistance in build- 
ing two ballistic missile assembly plants in Aleppo and Homs. 
Syria plans to assemble the Chinese M-9 solid fuel missile which 
can deliver a nuclear warhead to targets up to 600 kilometers 
away. 

Iran is engaged in a widespread effort to develop every type of 
unconventional weaponry, from chemical to biological to ballistic 
missiles and nuclear warheads. Ten nuclear facilities have been 
identified in public sources. Only six of these have been visited by 
the International Atomic Energy Agency. 

Iran's Defense Industries Organization employs over 100,000 
v/orkers and chums out everything from rifles and ammunition to 
rocket propellants, high-speed patrol boats, and a dozen different 
missiles. Iran has taken a page out of Iraq's book and is using in- 
dustrial projects to cloak its unconventional weapons program. It 



41 

is virtually impossible to tell the difference between a civilian and 
military end-user in Iran since virtually all importing entities in 
Iran are either state-run or state-controlled. 

WESTERN SUPPLIERS 

Let me say a word about suppliers of rogue regimes. 

Slowing the proliferation of weapons of mass destruction cannot 
be accomplished by the United States alone. Unilateral export con- 
trols are not the solution to this problem. 

Past experience with Iraq and the scandal over the involvement 
of German companies in building the Rabta poison gas works in 
Libya have shown that one important deterrent is public exposure. 
When dealings of these companies with rogue regimes come out 
into broad daylight, many companies will back off for fear of dam- 
aging their reputations. 

With this in mind, I have instructed the subcommittee staff to 
compile a list from publicly available materials of companies that 
have been identified as suppliers of dual use technology to Libya, 
Syria, Iran, and North Korea. Today I am releasing that list. It 
contains information on 400 companies from 40 countries that have 
supplied goods and production equipment with dual civilian and 
military applications. 

I want to emphasize that some of these sales appear to be per- 
fectly legitimate and involve large reputable corporations. Some ex- 
porters appear to have acted in good faith. Their inclusion in our 
list does not mean that they are guilty of any criminal behavior. 
Rather it shows the length to which rogue regimes will go to cir- 
cumvent Western export controls in their determined drive to ac- 
quire weapons of mass destruction and the means to deliver them. 

There are other cases, however, which are more serious. A con- 
glomerate of European chemical companies led by Bayer AG and 
Lurgi in Germany that includes Ciba-Geigy in Switzerland has 
been working for the past 5 years to complete a pesticide plant in 
Qazvin, Iran, which has been clearly identified by the German Gov- 
ernment as a chemical weapons site. 

Despite these warnings, the companies have persisted in their ef- 
forts to complete the contract and have lobbied the Grerman Gov- 
ernment to allow them to make additional deliveries. 

In another case, a Swiss subsidiary of Bayer, Bioengineering AG, 
has been manufacturing special reactor vessels and fermenters for 
Iran which have direct application to the manufacture of biological 
warfare agents. Warned against continuing these contracts by the 
Swiss Government but not forbidden, the company attempted to 
ship the fermenters in February 1992. Unidentified intruders blew 
up the equipment during a midnight raid on the premises of this 
company and struck on two subsequent occasions when the com- 
pany tried again to deliver this equipment to Iran. 

Another corporate proliferator worthy of being singled out is the 
Leybold Corporation of Hanau, Germany. Leybold and its parent, 
Degussa AG, has sold vacuum pumps with nuclear weapons and 
ballistic missiles application to every nuclear wannabe state in the 
Third World. Its clients include Iraq, Iran, North Korea, Libya, 
Syria, India, and Pakistan. 



42 

Entire Iranian munitions plants are equipped with machine tools 
from Fritz Werner Corporation of Grermany, Friederick Deckel of 
Germany, and the Georg Fischer company of Switzerland. 

GROWING CHINESE ROLE 

Chinese state-owned companies are playing an increasing role as 
suppliers to rogue regimes. The fact that only a dozen Chinese 
companies are identified for their suppliers of dual use tech- 
nology — as opposed to 108 German companies, 60 American compa- 
nies and 30 companies each from France and Great Britain — 
should not suggest that China has been less active than other sup- 
pliers. Rather, the Chinese have displayed a greater talent for sub- 
terfuge, well aware that news of these sales could damage their 
commercial relations with the West. 

Furthermore, the lack of a free press in China has meant the 
total absence — the total absence of public scrutiny. Hundreds of 
production entities are engaged when Beijing decides to sell ballis- 
tic missiles to Syria, Libya, or Iran. We just don't know their 
names. Our report lists only the most notorious among them. 

In many instances, the Chinese serve as transit points for the 
sale of Western technologies to rogue regimes. Advanced elec- 
tronics, computers, and sensing devices sold legally to China are in- 
corporated into ballistic missne systems and reexported to coun- 
tries such as Syria and Iran. The U.S. Customs Service and the 
Commerce Department's Office of Export Enforcement are cur- 
rently investigating scores of cases involving Chinese high-tech- 
nology procurement rings in this country. 

U.S. EXPORTS TO IRAN 

I would like to say a word about U.S. exports to Iran. On October 
23, 1992, former President Bush signed into law the National De- 
fense Authorization Act which included a provision known as the 
Iran-Iraq Nonproliferation Act of 1992. This amendment extended 
all sanctions, then applicable to Iraq, equally to Iran; and it barred 
the sale of all goods and technology that appears on the commodity 
control lists. 

Despite this substantial change in legislation, U.S. sales to Iran 
have steadily increased over the past 3 years. The United States 
ranks sixth among Iran's suppliers in the industrialized world. U.S. 
companies exported $750 million worth of products to Iran in 1992, 
and our companies have maintained a similar level of sales to Iran 
during the first half of this year, despite the change in legislation 
which was intended to cutoff U.S. high -technology sales to Iran be- 
cause of Iran's continued support for international terrorism and 
the development of weapons of mass destruction. 

During the first 6 months since sanctions were imposed against 
Iran, nine export licenses worth $11 million were approved for that 
country all of which, in fulfillment of contracts signed before the 
new law went into effect. The rest of U.S. equipment shipped dur- 
ing this period, $461 million, involves what are called general des- 
tination licenses. Companies who use general destination licenses 
do not submit individual license applications so that neither the 
State Department nor the Department of Defense nor the intel- 
ligence community gets an opportunity to review these sales as was 



43 

intended by law. Only 1 year ago, however, the situation was com- 
pletely different. 

In 1992, 60 percent of our exports to Iran required individually 
validated licenses. $446 million out of $750 million in sales to Iran 
last year was equipment under our laws that required special li- 
censes in order to be exported. This year only 2V2 percent required 
licenses. Either there has been a massive shift in the kinds of 
goods being sent to Iran or something far more sinister is going on 
here. 

I want to spend a moment on potential violations of U.S. law. 
The subcommittee staff has obtained from the Census Bureau a list 
of selected U.S. exports to Iran for the first 5 months of this year. 

When this list was shown to two separate U.S. export control 
agencies, thev agreed that many of the sales should have required 
an individually validated license, even under the old rules. Under 
the new rules, they should not have been considered for export to 
Iran. This appears to be evidence of a violation of law. 

This appears to be evidence of a violation of law. One of the ex- 
ports in question was shipped directly to the Atomic Energy Orga- 
nization of Iran; two went to a suspected chemical plant. I was par- 
ticularly intrigued by the shipment in February of this year of a 
single computer worth $907,500 which went on a general destina- 
tion license. 

Under the old regulations, any 286 computer sold to Iran re- 
quired an individually validated license. You can purchase one of 
those computers for less than $800. This was a computer worth 
nearly $1 million. Something appears to be seriously wrong here. 

Let me conclude by suggesting that the Department of Commerce 
has apparently decided to exercise a "don't ask don't tell" policy. 
Exporters are not supposed to ask whether they need a license to 
ship to Iran and the Department of Commerce won't tell them if 
they don't ask. I do not believe this is what the Congress had in 
mind when it approved the Iran/Iraq Nonproliferation Act last fall. 

I am very much looking forward to hearing from our distin- 
guished panel of witnesses. They will add to our knowledge on 
these hearings. 

Before hearing from our witnesses, I would like to call on my 
good friend and distinguished colleague from Nebraska, the Rank- 
ing Republican of the subcommittee. Congressman Bereuter, for 
opening remarks he may care to make. 

[The prepared statement of Mr. Lantos follows:] 



44 



Statement by Congressman Tom Lantos 

Chairman, Subcommittee on International Security, 
International Organizations and Human Rights 



Rogue Regimes (Part II): Weapons Acquisition and Supplier 

Networks 

September 14, 1993 



For the past five months, the Subcommittee on International Security, 
International Organizations and Human Rights has been investigating the military 
capabilities and support networks of rogue regimes. These are nations which, by 
their actions, have earned a place on the State Department's list of countries 
supporting international terrorism and which pose a distinct, although not always 
direct, security threat to the United States. 

In June, the Subcommittee released a study of Iraq's renascent military 
potential. Our study showed that despite the most draconian regime of international 
sanctions ever imposed on a nation since World War II, Iraq has managed to 
rebuild 80 percent of its military manufacturing capabiHty, right before the eyes of 
International Atomic Energy Agency inspectors. 

The Iraqi venture is worthy of further study. Here was a Third World nation, 
without a well-developed indusu-ial base, which in just twenty years went about 
building the largest military industrial capability in the Middle East. Before 
Saddam's ambitions were cut short by Operation Desert Storm, he had built more 
than 40 major military factories - most of which are up and running again today. 

In the past, security analysts, think tanks, and university scholars have tended 
to focus on the sale of advanced conventional weaponry - those big ticket sales that 
make for dramatic headlines when they are first announced or revealed. Iraq 
showed us - it should have showed us - that the proliferation of weapons of mass 
destruction does not generally occur in the same way. With the exception of 
ballistic missile sales, these weapons are built, or assembled, in factories that are 
located in the countries that will be using them. And these factories have for the 
most part been designed and fitted out by Western companies. Once again, greed is 
leading some of the biggest corporations in the West to sell out our security to the 
very rogue regimes that are threatening our interests around the world. 



45 



The Iraqi example teaches us that we need to focus greater attention on the 
sale of dual-use technology if we want to slow down the proliferation of weapons 
of mass destruction. Computers, machine-tools, electronic test equipment, scientific 
instruments such as mass spectrometers and gas chromatography units, are vital 
building blocks to nations seeking to develop their own ballistic missiles and 
nuclear weapons. 

Most of this equipment is subject to stringent export controls. At least, that is 
the theory. 

The Enhanced Proliferation Control Initiative 

But rogue regimes seeking to build unconventional weaponry also need a wide 
variety of commonly available manufacturing equipment, chemicals, and industrial 
gear which are not subject to specific export controls, precisely because they are 
available from manufacturers around the globe. For this reason. President Bush 
instructed the Commerce Department and other relevant U.S. agencies in 
November 1990 to devise new regulations as part of his Enhanced Proliferation 
Conu-ol Initiative (EPCI). 

Under EPCI regulations, U.S. exporters are now required to obtain an 
individually validated license to export any goods - even a pencil or a screwdriver - 
to foreign entities or projects of "proliferation concern." The intent is to catch those 
goods and technologies that "fall through the cracks" of the multilateral 
proliferation control regimes. Under EPCI, the Commerce Department is required 
to inform exporters which projects and entities are on the black list, so to speak, to 
prevent equipment from reaching Iranian or Iraqi or Syrian or Libyan factories that 
are producing unconventional weaponry. 

As this investigation progressed, we became interested in finding out just how 
this system works. The Commerce Department informed us that they do not in fact 
publish a list of projects of proliferation concern, since that might jeopardize 
intelligence sources and methods. But if a company comes to them and asks if a 
particular export is okay, then Commerce will "inform" them that they require an 
individually validated license because of EPCI concerns. 

We asked Commerce how many "informed" notices they had sent out since 
the EPCI rules went into effect more than two years ago? 

One would think this would be an easy question to answer. After all, EPCI 
was enacted because of our failed export control policy toward Iraq. The 
Commerce Department was under a lot of public pressure to improve its 
performance. One would have thought that Commerce would want to keep very 



46 



close track of this information. However, the Bureau of Export Administration told 
us that Commerce does not keep records on EPCI cases. 

The Subcommittee wrote Secretary Brown on August 31, 1993 asking for a 
detailed report on EPCI cases and informed notices. I am sure he shares our 
concern that the Department keep proliferation at the very top of its export control 
agenda, and will make every effort to improve the Commerce Department's 
reporting procedures. [A copy of this letter is included in the hearing record]. 

Just the way the EPCI procedures are set up, however, begs the question. How 
many companies are actually going to contact the Commerce Department to 
express their doubts as to reputability of their client? The only case we know about 
- and this happened in 1989, before the EPCI rules were even conceived - was of a 
New Jersey exporter that warned Commerce that the special furnaces it had 
contracted to sell to Iraq could also be used in a nuclear weapons program. Even 
more astonishing than the fact that a company would willingly raise doubts about 
its own client was the reaction of the Commerce Department, which urged the 
company to disregard the nuclear capabilities of its equipment, the military 
activities of its client, and make the sale regardless. I am sure that Secretary Brown 
is making every effort to ensure this type of gross disregard doesn't happen again. 

WMD Programs 

All of the rogue regimes under discussion by the Subcommittee today - Iran, 
Syria, Libya, and North Korea - are deeply engaged in building a variety of mass 
destruction weapons. In some areas, they are helping one another out, forming a 
sort of international rogues gallery of would-be mass murderers. 

North Korea may have enough plutonium for the bomb, and continues to 
defy the International Atomic Energy Agency, which is seeking to inspect 
suspected nuclear weapons sites. This backward, Stalinist holdout has additionally 
become the foremost rogue supplier to other rogue regimes, exporting nuclear- 
capable missile systems throughout the Middle East. Most of its production gear 
has come from China, the Former Soviet Union, and Japan, where associations of 
North Korean residents have served as procurement fronts. In one instance that has 
come to my attention, it was actually an organ of the United Nations - the UN 
Development Organization - that sponsored the construction of a plant by Western 
electronics manufacturers in 1987. That plant is today supplying computer chips 
and guidance equipment used on North Korean ballistic missile systems. UNIDO 
has also trained North Korea scientists in a variety of advanced technology 
manufacturing skills, and has promoted the establishment of a machine-tools 
industry in North Korea. 



47 



Libya is building yet another chemical weapons plant in the village of Ras 
Fam Mullagha, near the town of Tarhuna, 65 km southeast of Tripoli. To acquire 
technology abroad, it is disguising this plant as part of the "Great Man Made River" 
project, which is being spearheaded by the French construction giant, Bouygues. 
Companies in Switzerland, Austria, and Germany have supplied tunneling 
machines and special ventilation equipment, enabling the Libyans to build this 
plant underground where our satellites cannot observe it as closely as they did the 
Rabta plant. India has supplied chemicals for mustard gas and nerve agents. 

According to Britain's Guardian newspaper', another new plant is underway 
near Benghazi that will produce precursor chemicals for the Tarhuna poison gas 
works. The Benghazi facility is being disguised as an extension of a Liquid 
Petroleum Products (LPP) plant, and will include a production Hne capable of 
turning out more than 100 tons per year of pinacolyl alcohol, a key ingredient for 
the nerve agent soman. This chemical's main legitimate use is in the production of 
perfumes - not a booming industry in Qaddafi's Libya. Indeed, the entire world 
perfume industry only consumes some 20 tons per year. And Libya wants to make 
five times that amount - I am sure, to disguise the bad odor of the Qaddafi regime. 

Libya continues to purchase equipment for its ballistic missile programs from 
German suppliers, including the Fritz Werner company and Leybold AG, one of the 
world's foremost suppliers of advanced technology. Libya hired a team of German 
engineers in the late 1970s to build a long-range rocket. Some of these engineers 
are still believed to be working on conu^act for Qaddafi. To the best of our 
knowledge, the German government has done nothing to limit their activities. 

On Dec. 24. 1991 Libya and North Korea signed a major trade and technology 
transfer agreement, that may have included a provision for Libya to purchase North 
Korean SCUD-C and Nodong-1 missiles. International sanctions against Libya for 
its involvement in the Pan Am 103 bombing may have made it more difficult, but 
not impossible, for Libya to continue its foreign purchases of unconventional 
weapons and production gear. 

Syria has been a chemical weapons state for most of the past ten years, and is 
now believed to have several small facilities actively producing nerve gas and 
biological warfare agents. Many of these are disguised as state-run pharmaceuticals 
plants. Major pharmaceuticals companies in Germany, France, the Netherlands, and 
Britain have supplied chemicals and production equipment in recent years, while a 
U.S. firm. Baxter international, contracted to build an entire factory for the Syrian 
Ministry of Defen.se. CIA Director James Woolsey has included Syria in his list of 



^ Alan Crcorsc, "l.ib\an I'oison Gas Deal Blocked," The Guardian, March 22, 
1 <)').■!. 



48 



countries with a biological weapons capability - a very unsettling prospect even as 
peace with Israel approaches. 

From China, Syria is receiving extensive assistance in building two ballistic 
missile assembly plants, located in Aleppo and in Horns. Syria plans to assemble 
the Chinese M-9 solid fuel missile, which can deliver a nuclear warhead to targets 
up to 600 kilometers away. A Chinese ship carrying some 30 M-9 launchers was 
tracked en route to Syria in June 1991 ; additional deliveries of missile assemblies 
have occurred since. The company orchestrating these missile deals is the China 
Precision Machinery Import-Export Corporation, the same entity that has sold 
missiles to Pakistan, Iran, and Saudi Arabia. China is also supplying Syria with 
nuclear technology, including a small research reactor. 

Some reports allege that Libya is helping to finance this $170 million missile 
deal, and expects to receive sixty missiles in exchange for its payments. If so, this is 
yet another example of cross-fertilization among rogue regimes, a pattern I suspect 
we are going to see with increasing frequency in the years to come. 

Syria got its start in unconventional weapons production and learned about the 
procurement of dual use technologies from an unusual source: the leading 
government-run scientific research institution in France, the CNRS (Centre 
Nationale de Recherche Scientifique). The CNRS signed a series of cooperation 
agreements with Syria starting in 1969 that established the Syrian Scientific 
Research Council, also known by its French acronym, CERS (Centre d'Etudes et de 
Recherche Scientifique). As CIA Director Woolsey testified before the 
Subcommittee in June, CERS is the leading research & development agency for 
Syria's unconventional weapons programs, and reports directly to Syrian President 
Hafez al Assad. CERS regularly sends out procurement teams to Western Europe 
and the United States in search of specialized production equipment. Although our 
Commerce Department blacklisted CERS several years ago, our investigation has 
determined that Germany, France, Belgium, and Britain continue to approve the 
sale of dual-use technology to CERS, including high temperature furnaces of use in 
ballistic missile and nuclear weapons programs. The furnaces were delivered last 
year by German firms and were approved for sale by the German Economics 
Ministry. 

Iran is engaged in a widespread effort to develop every type of 
unconventional weaponry, from chemical and biological agents, to ballistic 
missiles, fuel-air explosives, and nuclear warheads. Ten nuclear facilities have been 
identified in public sources; only six of these have been visited by the IAEA. Iran's 
Defense Industries Organization employs over 100,000 workers, and churns out 
everything from rifles and ammunition to rocket propellants, high-speed patrol 
boats, and more than ten different missiles. Iran has torn a page out of Iraq's book 
and is using industrial development and reconstruction projects to cloak its 



49 



unconventional weapons programs. Purchases earmarked for so-called civilian 
companies and projects are in fact intended for the Iranian military. As we have 
been told during this investigation by export control officials in various U.S. 
government agencies, there is simply no way of telling the difference between a 
civilian and military end-user in Iran, since virtually all importing entities in Iran 
are either state-run or state-controlled. The same company that is in charge of 
improving Iran's telecommunications network, for instance, is also engaged in 
producing frequency hopping radios for the Iranian military. Civilian steel plants 
are also making rocket cases for ballistic missiles. 

For more detailed information on the unconventional weapons programs of 
these countries, I cannot recommend too highly a report released in August 1992 by 
the Simon Wiesenthal Center in Los Angeles, entitled "Weapons of Mass 
Destruction: the cases of Iran, Syria, and Libya." I also understand that the 
Monterey Institute is about to publish a detailed study on Third World ballistic 
missile programs that will include a chapter on Iranian programs that was written 
by Josephe Bermudez, one of our witnesses today. 

Suppliers List 

Slowing the proliferation of weapons of mass destruction cannot be 
accomplished by the United States alone. Unilateral export controls are not the 
solution to this problem. The extent to which multilateral controls and policies can 
slow or stop the spread of critical technologies to rogue regimes is a subject of 
ongoing debate. 

However, past experience with Iraq, and the scandal over the involvement of 
German companies in building the Rabta poison gas works in Libya, have shown 
that we in Congress have one very powerftil tool that is not exploited frequently 
enough: public exposure. When their dealings with rogue regimes come out into the 
light, many companies will back off for fear of damaging their reputation. 

With this in mind, I instructed the subcommittee staff to compile a list from 
publicly available material of companies that have been identified as suppliers of 
dual-use technology to Libya, Syria, Iran, and North Korea. I am releasing that list 
today. It contains information on more than four hundred companies from forty 
countries that have supplied goods and production equipment with dual civilian and 
military applications. 

Some of these sales appear to be perfectly legitimate and involve large 
reputable corporations. For instance, BP America was seeking approval late last 
year to build a textile factory in Iran. They were turned down by the White House 
in January because the chemical processes used to make the synthetic fibers Iran 
sought could also be applied to chemical weapons manufacturing. In a similar case. 



50 



the Ayres Corporation of Albany, Georgia sought approval to sell crop-dusting 
aircraft to Iran but was turned down because similar aircraft had been used by Iraq 
to spray civilians with chemical warfare agents. 

In cases such as these, the exporters appear to have acted in good faidi. Their 
inclusion in our list does not mean they are guilty of criminal behavior; rather, it 
shows the lengths to which rogue regimes will go to circumvent Western export 
controls in their determined drive to acquire weapons of mass destruction and the 
means to deliver them. 

I can be less sanguine about other cases. A conglomerate of European 
chemical companies, led by Bayer AG and Lurgi in Germany that includes the 
pharmaceuticals company Ciba-Geigy in Switzerland, has been working for the 
past five years to complete a pesticides plant in Qazvin, Iran that has been clearly 
identified by the German government as a chemical weapons site. Despite these 
warnings, the companies have persisted in their efforts to complete the contract and 
have lobbied the German government to allow them to make additional deliveries. 
Unfortunately, two of the four production lines at this plant were already built by 
these companies before the German government intervened to block further 
deliveries. 

In another case, a Swiss subsidiary of Bayer, Bioengineering AG, has been 
manufacturing special reactor ves.sels and fermenters for Iran which have direct 
application to the manufacture of biological warfare agents. Warned against 
continuing these contracts by the Swiss government but not forbidden, the company 
attempted to ship the fermenters in February 1992. Unidentified intruders blew up 
the equipment during a midnight raid on the company premises, and struck on two 
subsequent occasions when the company tried again to deliver this equipment to 
Iran. . 

Another corporate proliferator worthy of being singled out is the Leybold 
Corporation of Hanau. Germany. Leybold and its parent company, Degussa AG, 
have sold vacuum pumps and high technology furnaces with nuclear weapons and 
ballistic missile applications, to every nuclear wannabe state in the Third World. 
Clients include Iraq, Iran, North Korea, Libya, Syria, India, and Pakistan. Leybold 
officials .say that since March of last year they have turned over a new leaf and will 
no longer sell such technologies to countries of proliferation concern. The 
company's Washington lobbyist, Burson-Marsteller, has contacted the Committee 
on Foreign Affairs on several occasions in an attempt to clear Leybold's name. 
However, when we requested that Leybold supply additional information to 
support these claims, the corporate guns went silent. To the best of our knowledge, 
there has been no substantial decline in Leybold's foreign sales as a result of its new 
corporate principles. 



51 



The Fritz Werner Corporation, also of Germany, stands out for its persistent 
willingness to help Libya and Iran build conventional weapons and ballistic 
missiles. Documents obtained by the Subcommittee from the Defense Industries 
Organization of Iran at the IDEX '93 defense exhibition in Abu Dhabi show entire 
Iranian munitions plants equipped with machine tools from Fritz Werner, from 
Friederick Deckel, and from the Georg Fischer company of Switzerland. In Libya, 
Fritz Werner has been supplying equipment to the Al-Fatah ballisdc missile 
program directly and through Leybold AG. 

Chinese state-owned companies are playing an increasingly role as suppliers 
to rogue regimes. The fact that only a dozen Chinese companies are idendfied for 
their supplies of dual-use technology - as opposed to 108 German companies, 60 
American companies and 30 companies each from France and Great Britain - 
should not suggest that China has been less active than other suppliers. Rather, the 
Chinese have displayed a greater talent for subterfuge, well aware that news of 
these sales could damage their commercial reladons with the West. Furthermore, 
the lack of a free press in China has meant a total absence of public scruUny. 
Hundreds of producdon endties are engaged when Beijing decides to sell ballisdc 
missiles to Syria, Libya, or Iran: we just don't know their names. Our report lists 
only the most notorious among them. 

In many instances, the Chinese are serving as transit points for the sale of 
Western technologies to rogue regimes. Advanced electronics, computers, and 
sensing devices sold legally to China are incorporated into ballisdc missiles 
systems and re-exported to countries such as Syria and Iran. The U.S. Customs 
Service and the Commerce Department's Office of Export Enforcement are 
currently investigadng scores of cases involving Chinese high-technology 
procurement rings in this country. I believe the Commerce Department would 
discover a massive diversion of U.S. goods to Chinese ballisdc missile exports if 
they carried out their statutory duty and conducted pre-license and post-shipment 
inspecdons in China. 

The case ofStemme 

Informants in Germany have provided documents to the Subcommittee 
detailing the propo.sed sale by a Berlin company, Stemme GmbH, of remotely 
piloted vehicles for use as battlefield reconnaissance platforms and for terrorist 
attacks. 

Unpiloted aircraft similar to these were used by our forces with great success 
during Operation Desert Storm. They allow commanders to receive real dme video 
footage of the enemy, so they can better deploy their forces on the battlefield. 



52 



The Stemme SIO RPV is extremely advanced. Because of its small size and 
extremely silent engine, it can evade most surveillance radar and escape detection. 
Low fuel consumption allows it to fly long distance missions up to 2600 kilometers 
from its launching point. In its commercialized version, it can carry a payload of 
100 kilograms. With slight modifications, it could carry as much as five or six 
times that weight. If Iran were seeking to drop a nuclear weapon on the Saudi oil 
fields or on Israel, it could find no better weapon. I am told by experts in this field - 
and I have appended the specifications of this aircraft to my testimony - that these 
aircraft perform very much as would a cruise missile. 

Our informants tell us that the Stemme company has taken extraordinary 
precautions in order to make this sale, valued at just over $3 million. Because it is 
unlikely the German government would allow such a sale if declared openly, 
Stemme is going through the intermediary of a small aerospace company in 
Jasienica, Poland. The deal involves setting up an entire production line for the 
Stemme SIO in Iran, and the training of Iranian workers in Germany. In addition to 
complete factory tooling, Stemme is selling Iran advanced composite materials 
such as carbon/carbon. Kevlar. and Aramid, which have applications for ballistic 
missiles as well. The Iranian purchaser has been identified as a Mr. Abdel Ghomer, 
an engineer with the Defense Industries Organization of Iran. 

I would hope that the German government would take the necessary steps to 
prevent this sale immediately. 

U.S. exports to Iran 

Iran was placed on the terrorist list by the State Department in 1984. This 
meant the mandatory imposition of stringent export controls on a broad range of 
dual-use technology. These controls were tightened in 1987, and again in 1989, to 
cover virtually all computers, machine-tools, large diesel engines, commercial 
aircraft, navigation equipment, electronic test equipment, and scientific 
instruments. 

On Oct. 23, 1992, President Bush signed into law the National Defense 
Authorization Act (NDAA), which included a provision authored by Senator John 
McCain known as the Iran-Iraq Nonproliferation Act of 1992 (PL 102-484). This 
bill extended all sanctions then applicable to Iraq equally to Iran, and barred the 
sale of all goods and technology that appear on the Commodity Control Lists. 

You would think that such a dramatic legislative step would have a drastic 
effect on U.S. sales to Iran. But this is not so. In fact, U.S. companies, apparently 
with the encouragement of our Commerce Department, have been steadily 
increasingly sales to Iran over the past two years. 



53 



If you look at the attached table of Exports to Iran from OECD countries you 
will see that last year the U.S. ranked sixth among Iran's suppUers in the 
industrialized world. U.S. companies racked up nearly $750 million in sales to Iran. 
Our companies have maintained a similar level during the first half of 1993 - 
despite what was intended by lawmakers to be a total cutoff in U.S. high 
technology sales to Iran because of Iran's continued support for international 
terrorism and its development of mass destruction weapons. 

In response to our queries, the Commerce Department informed us that during 
the first sixth months since the NDAA went into effect, nine export licenses worth 
$1 1 .6 million were approved for Iran, all of which had contract sanctity - in other 
words, which involved contracts signed before the new law went into effect. The 
rest of the U.S. equipment shipped to Iran during this period - and we are now 
talking about $461 million from November 1992 through May 1993 - involved 
what are called General Destination (G-DEST) licenses. Companies using G-Dest 
licenses do not submit individual license applications, so that neither the State 
Department, the Department of Defense nor the intelligence community gets an 
opportunity to review these sales, as was intended by law. 2 

Only one year ago, the situation was inversed. For all of 1992, the Commerce 
Department approved a total of 135 individually validated licenses (IVLs) for Iran, 
worth $446. 1 million. That was out of total sales to Iran worth $750 million. In 
other words, until the Iran-Iraq Nonproliferation Act went into law on October 23, 
1992, 60% of all U.S. shipments to Iran required an individually validated export 
license, while under the tougher new rules, only 2.5% of U.S. exports to Iran 
apparently require licensing. 

Now this is really quite extraordinary. Either we are shipping inferior goods, 
or somebody is telling us a cock and bull story. 

Potential violation of U.S. law 

I have obtained a document from the Census Bureau which sheds some hght 
onto what has apparently happened. This is a month by month breakdown of 
selected U.S. exports to kan for the first five months of this year. 

The listing provides the unified tariff code, a description of the commodities 
exported, the quantities involved, the dollar value, and the type of license authority 
u.sed - IVL or G-Dest. 

Let me read out just a few of these items and how they were shipped. 



^ I .ciiii] counsel consulicd by Uic Subcommiitce mainiains ihat PL-484 does noi allow for contract 
>>;uictiiv. nor docs ii yrani ilic Commerce iX'p;irunent the discretionary power to grant exceptions, or to 
allow licenvible equipmetu Ki be shipped under G-Dest authority. 



54 



- Toxins, Cultures of Micro-organisms: G-DEST 

- Turbojet Turbines, excluding aircraft, thrust exceeding 25 kilo-Newton's: G- 
DEST 

- Air or Vacuum pumps: G-DEST 

- Machinery for Liquefying Air or other gases: G-DEST 

- Cenuifuges: G-DEST 

- Pans of Centrifuges :G-DEST 

- Machine-tool holders and self-opening dieheads :G-DEST 

- Gas Separation equipment :G-DEST 

- Hydraulic presses, metal forming :G-DEST 

- Electric generating sets :G-DEST 

- Spectrophotometers :G-DEST 

- Electric Spectrometers and Spectrographs :G-DEST : 

- Gamma camera system for detecting Ionizing radiations :G-DEST 

- Laboratory furnaces :G-DEST 

- Gas turbine engines, power exceeding 5,000 kW :G-DEST 

- Machines as special attachments for machine tools :G-DEST 

- Parts of Metalworking machine-tools for cutting gears :G-DEST 

- Cathode- Ray Oscilloscope :G-DEST 

I invite you to compare these items to the Ust appended to my statement that 
was supplied by the Commerce Department of licensable goods "which will be 
subject on application to a policy of denial." 

Weprovided the same lists two separate U.S. export control agencies, and the 
response we got was the same. Most of these sales should have required an 
individually validated license, even under the old rules. Under the new rules, they 
never should have been considered for export to Iran, period. This is prima facie 
evidence of a violation of law. 

One of the exports in question was shipped directly to the Atomic Energy 
Organization of Iran; two went to a suspected chemical weapons plant. I was 
particularly intrigued by the shipment in February of this year of a single computer 
worth $907,500. Once again, it went on a G-Dest license. Under the old 
regulations, computers with a speed of 6 MTOPS were controlled for Iran and 
required an individually validated license. That's about the power of an IBM 
compatible 286 machine, which sells today for less than $800. 

Another potential explanation of this situation was provided to the 
Subcommittee by Peter Sullivan, the Acting Deputy Undersecretary of Defense for 
Trade Security Policy. In a letter to the Subcommittee on August 2, 1993, Mr 
Sullivan noted that the Commerce Department "is not required to obtain the 
concurrence of or consult with the Department of Defense or any other department" 
in making commodity classifications that would effectively remove given items 



55 



from the control lists. "DoD has encouraged Commerce to refer commodity 
classification requests to DoD for review. On occasion, Commerce has done so, but 
has not established a standard referral process." 

When it comes to proliferation controls, the Commerce Department has 
apparently decided it would exercise a "don't ask, don't tell" policy. Exporters are 
not supposed to ask whether they need an license to ship to Iran, and the Commerce 
Department won't offer to tell them so long as they don't ask. If exporters do ask, 
then the Commerce Department may, without consulting any other governmental 
agency, simply remove items from the commodity control lists to permit them to be 
shipped on a G-Dest license. 

This is not what Congress had in mind when it approved the Iran-Iraq 
Nonproliferation Act. 

Section 6(j) of the Export Administration Act requires the Commerce 
Department to provide the Committee on Foreign Affairs with 30 day prior 
notification before any license is approved for the export of goods or technology to 
countries on the terrorist list. According to the logs of our Committee, however, the 
last such notification was received here in 1987. 1 have therefore requested that 
Secretarv' Brown provide this Subcommittee with a report on all licenses approved 
to countnes on the terrorism list. I am also asking him to supply a repon on any 
commodity classifications made by Commerce since the enactment of PL 102-484. 

Because the issues here are so serious - they are hterally of life and death - the 
Subcommittee will hold additional hearings in the future on this subject, and is 
studying potential legislative measures to improve our nonproliferation control 
system. Not only must the U.S. put its own house in order, but we must secure 
greater cooperation from our allies to ensure that U.S. companies are not put at a 
competitive disadvantage by refusing contracts, only to have foreign companies 
leap into the breach. 



56 

Mr. Berf:uter. We have had difficulty getting started today be- 
cause of the house voting schedule. I am anxious to hear our distin- 
guished panel. I ask unanimous consent to have my opening state- 
ment made part of the record so that we can proceed. 

Mr. Lantos. Without objection, we will do so. 

[The prepared statement of Mr. Bereuter follows:! 

Prepared Statement of Hon. Doug Bereuter 
ROGUE REGIMES 

Thank you, Mr. Chairman. I commend you for scheduling this very timely and im- 
portant hearing. I fully share the Chairman's concerns regarding the risk of pro- 
liferation of the technology associated with weapons of mass destruction to rogue 
regimes such as Iran, Iraq, North Korea, and Libya. 

One of my longstanding concerns is with the "brain drain" and "loose nukes" prob- 
lem emanating from the former Soviet Union. 

In the House I sponsored Senator Brown's (R-CO) successful legislation that fa- 
cilitated the emigration of some 750 unemployed Russian nuclear scientists to the 
United States. The goal was to act as an emergency safety valve in keeping the best 
Russian talent out of the hands of Saddam Hussein, Col. QhadafTi, and others. How- 
ever, this was admittedly only a stop-gap measure, and the problem is enormous. 

I have no doubt that the overwhelming majority of Russian scientists are honor- 
able and responsible individuals. They surely recognize the dangers in working for 
someone like Saddam Hussein. But with the continuing confusion and shortages, 
the temptations surely will increase. 

And we must also be concerned about various technicians and workers who might 
have the opportunity to steal nuclear material, or the military officer who cannibal- 
izes his equipment and sells high technology components on the black market. 

Through tne Nunn-Lugar program, the United States is trying to help Russia 
maintain control over Soviet nuclear weapons and technology. Yet, the problem is 
enormous, and it will remain a major problem for decades to come. 

While Russian or Soviet "loose nukes" is perhaps the most serious threat, there 
obviously are other very important matters. The chairman has referred to several 
of these concerns — the Chinese export of ballistic missiles and key components; the 
aggressive pursuit of weapons of mass destruction by North Korea, Iran, and the 
other rogue regimes; and the export of sensitive technologies by Western companies. 

The subconrmiittee is fortunate today to have such outstanding witnesses to share 
their views on these matters. I look forward to hearing from them. 

Mr. Lantos. I understand that Mr. Potter needs to leave to catch 
a plane by 4 o'clock, so we will begin with you. Mr. Potter is Direc- 
tor of the Program for Nonproliferation Studies at the Monterey In- 
stitute of International Studies. 

Mr. Potter, your prepared statement will be entered in the record 
in its entirety and you may proceed in any way you choose. 

STATEMENT OF WILLIAM POTTER, DIRECTOR, PROGRAM FOR 
NONPROLIFERATION STUDIES, MONTEREY INSTITUTE OF 
INTERNATIONAL STUDIES 

Mr, Potter. Thank you very much, Mr. Chairman. 

I am very pleased to have the opportunity to testify before the 
subcommittee on the issue of the proliferation risks posed by nu- 
clear exports from the Soviets successor states. 

By way of introduction to the topic, I believe it is useful to note 
that Soviet nuclear export and nonproliferation policy was note- 
worthy for the unusual degree to which it was in concert with that 
of the United States. This cooperation persisted during even the 
most troubled periods of superpower relations in the 1970's and 
1980's and was reflected in regular bilateral consultations and in 
a variety of multilateral fora. 



57 

Notwithstanding this cooperation and overall commendable 
record on nonproliferation, the Soviet Union in the late 1980's and 
early 1990's undertook a number of nuclear export initiatives that 
signaled a less prudent approach to nonproliferation. These initia- 
tives included efforts to market goods and services to non-NPT par- 
ties without requiring the application of so-called full scope safe- 
guards as a condition of export. 

During the same period, the Soviet Union also adopted a more 
lax nuclear export policy toward NPT states and expressed a readi- 
ness, for example, to sell South Korea sensitive nuclear technology 
including uranium enrichment and fast breeder reactor processes. 
Although none of these export initiatives were prohibited by the 
NPT, they implied that even long-time supporters of nonprolifera- 
tion were for the right price prepared to sell nuclear equipment, 
technology, and services to potential proliferators. 

The basic economic and domestic political conditions which en- 
couraged a reorientation in Soviet nuclear export policy under 
Gorbachev remain today, but in a more acute form. Nuclear goods 
and services along with other defense-related products are among 
the few commodities from the former Soviet Union that are in de- 
mand abroad and are able to generate hard currency. They also are 
increasingly available to private and quasi-private entrepreneurs 
who have found a foothold in the nuclear export industry pre- 
viously monopolized by the state-run firm Techsnabexport. 

NUCLEAR SMUGGLING 

It is important to emphasize at the outset, nevertheless, that 
most of the more sensational accounts of black market activities in- 
volving nuclear materials of NIS origin have not been substan- 
tiated. There is no hard evidence, for example, that nuclear weap- 
ons, nuclear weapon components, or significant quantities of weap- 
on grade fissile material has been smuggled out of the Soviet suc- 
cessor states. 

Unfortunately, conditions in the former Soviet Union are such 
that many of the reports are plausible if not true. One must be 
very careful not to discount the potential for proliferation-signifi- 
cant black market exports from the Soviet successor states based 
on what has been discovered to date. 

There are also indications that governmental organs in some of 
the newly independent states may tolerate if not officially sanction 
the export of sensitive nuclear commodities with little regard for 
their proliferation implications. What is perhaps most surprising 
given the economic chaos in the former Soviet Union is the absence 
of more substantial cases of nuclear smuggling. 

To be sure, nuclear-related items have found their way out of the 
Soviet successor states. Germany alone is alleged to have carried 
out over 100 arrests associated with efforts to smuggle nuclear ma- 
terial originating in the Republics of the former Soviet Union. 

The Government of Belarus also has acknowledged a number of 
illicit transactions involving its territory including the interdiction 
of Russian uranium destined for Poland. According to Russian nu- 
clear regulatory officials, even the Ministry of Atomic Energy re- 
cently has confirmed that some quantities of fissile material has 
been stolen from its stockpiles. 



58 

While one can not discount the possibility of undetected and mili- 
tarily significant nuclear trade, the overwhelming majority of ar- 
rests and confirmed cases of smuggling attempts to date have in- 
volved small quantities of low-enricheaf uranium from civilian nu- 
clear reactors, nonweapons-related radioactive elements, such as 
cesium, cobalt and strontium, and bogus goods falsely promoted as 
nuclear. 

No uranium that has been seized, to the best of my knowledge, 
has been enriched beyond 3 percent and most of the minuscule 
amounts of plutonium that has been confiscated has been in the 
form of fiakes from smoke detectors. 

The area in which nuclear related trade from the former Soviet 
Union has flourished with scarcely a peep from Western govern- 
ments is in dual-use materials. The two principal transgressors ap- 
pear to be Ukraine and Estonia. 

EXPORTS FROM UKRAINE AND ESTONIA 

The Ukrainian case is the less surprising of the two given 
Ukraine's extensive and diverse nuclear-related capabilities, its 
desperate search for hard currency earnings, and its ambiguous 
stance toward nuclear nonproliferation. 

The center for producing nuclear-related dual-use items in 
Ukraine is at Dneprodzerzhinsk — until recently a closed military- 
industrial production complex. Dneprodzerzhinsk hosts a number 
of facilities for the production of heavy water, zirconium and haf- 
nium. 

It is the single production site in the former Soviet Union for ion 
exchange resins used in the so-called Asahi chemical exchange 
process of uranium enrichment. 

According to a U.S. firm which became part owner of one chemi- 
cal plant at Dneprodzerzhinsk, its Ukrainian partner has already 
shipped some 45 tons of hafnium and zirconium, 2 of the 65 items 
on the Nuclear Suppliers Group restricted list, to Belgium and the 
Netherlands where they sat for months at docks in Antwerp and 
Rotterdam awaiting export to unknown third parties. 

An additional shipment of 11 tons of hafnium from the same 
complex was detained in the fall of 1992 by Hungarian authorities 
who were suspicious about its end use. All of these Ukrainian pro- 
duced commodities would be subject to stringent export control if 
Ukraine were a party to the April 1992 Nuclear Suppliers Group 
accord on dual-use items. 

Unfortunately, it is not; nor has it been invited to join the Nu- 
clear Suppliers Group. 

A less well-known and more surprising major exporter of dual- 
use items from the former Soviet Union is Estonia, a 1992 signa- 
tory of the Nuclear Nonproliferation Treaty, but not a party to the 
1992 Nuclear Suppliers Group accord. Although lacking in indige- 
nous production capability, Estonia recently has emerged as one of 
the world's leading exporters of rare metals, some of which have 
nuclear weapons applications. 

In one bizarre case last year, 4 tons of Russian zirconium was 
supposed to be routed to Estonia by an American-owned firm osten- 
sibly for purposes of jewelry production. When contacted by sus- 
picious Russian export control officials, the Estonian Grovernment 



59 

could not guarantee that Estonia was the end user of the material 
which was of a grade and quantity incompatible with jewelry man- 
ufacturing purposes. 

This particular license application was denied, but Russian offi- 
cials believe large quantities of dual-use metals exported from Es- 
tonia ultimately find their way to states coveting nuclear weapons. 

A major export control problem results from the fact that none 
of the nuclear facilities in the former Soviet Union are under inter- 
national safeguards. The bulk of these sites are well known and 
are concentrated in Russia, which is not obliged to place any of its 
facilities under safeguards by virtue of its status as a nuclear 
weapons state party to the nonproliferation treaty. 

Less well known is the presence of nuclear fuel cycle facilities 
and nuclear material stockpiles in the non-Russian Republics. Al- 
though these nuclear assets are not likely to be adequate to sup- 
port an indigenous nuclear weapons program — with the possible 
exception of Kazakhstan — they do pose significant proliferation 
risks from the standpoint of nuclear exports. 

^rUCLEAR EXPORTS FROM OTHER CIS STATES 

In my prepared written statement, I have a table detailing these 
nuclear assets in each of the republics. At this time I will only note 
a few of the more proliferation significant sites. The most con- 
troversial and potentially significant fuel cycle facility outside of 
Russia is Navoi in Uzbekistan where there may be a pilot uranium 
enrichment facility, although its characteristics and present status 
are in doubt. I say more about that in my written statement. 

The non-Russian states also have nuclear research and training 
centers in Yerevan in Armenia, Riga in Latvia, Minsk in Belarus, 
Kiev and Sevastapol in Ukraine, Almaty and Semipalatinsk in 
Kazakhstan, Tbilisi and Sukhumi in Georgia and Tashkent in 
Uzbekistan. Many of these centers are co-located with research re- 
actors that are fueled with highly enriched uranium. 

For example, the three research reactors at Semipalatinsk have 
a total uranium 235 inventory of 24 kilograms, at least 9 kilograms 
of which is probably enriched to over 90 percent. 

A greater nuclear export and nonproliferation risk is posed by 
the unsafeguarded liquid metal fast breeder reactor at Aktau in 
Kazakhstan. This reactor, used for both desalination and electricity 
generation purposes, is capable of producing over 100 kilograms of 
weapons grade plutonium a year. It is not known how much pluto- 
nium has been produced by the Kazakhstani reactor since it began 
commercial operation in 1973 or how much unsafeguarded pluto- 
nium remains at the reactor site. 

One additional site in Kazakhstan is of particular importance 
from the standpoint of unsafeguarded nuclear exports. It is the 
Ulbinsky Metallurgy Plant in Ust-Kamenogorsk. This plant is the 
largest producer in the former Soviet Union of beryllium used in 
civilian nuclear power reactors and also in the manufacture of nu- 
clear weapons. 

The plant also produces nearly all of the fuel pellets used in So- 
viet-manufactured reactors. These pellets contain uranium already 
enriched to a low level at gas centrifuge plants in Russia. As such 
they may be attractive to countries with nuclear weapons ambi- 



60 

tions such as Iran and Iraq because the initial, most energy con- 
suming part of enrichment has already been completed. 

The fuel pellets can also be used once crushed to obtain uranium 
tetrachloride for use in a calutron enrichment process. Interest- 
ingly enough, Kazakhstan's minister for science and technology 
only a month ago offered to sell India these low-enriched uranium 
pellets. 

Implementation of effective nonproliferation strategy in the 
former Soviet Union is hindered by the low priority most policy- 
makers attach to the issue of export controls. In most cases, this 
is not because national policymakers are opposed to the principles 
of export control and nonproliferation. Instead it is a product of 
only faint recognition of the issue's relevance to their immediate 
situation in which they struggle to survive from one crisis to the 
next. 

Unfortunately, even for those successor states where there may 
be some recognition of the importance of export control such as 
Belarus, budget deficits and a shortage of trained personnel remain 
serious obstacles to meaningful corrective action. Only in Russia, 
which inherited most of the Soviet Union's nuclear export control 
structure, can one speak of a professional cadre of nonproliferation 
experts, well-versed in such matters as export control licensing, 
material accounting, physical protection and international safe- 
guards. 

Even in Russia, which in 1992 adopted significant new export 
control measures, problems persist because of a combination of bu- 
reaucratic, legal and economic factors. A battle, for example, con- 
tinues to be waged among the Ministry of Foreign Affairs, the Min- 
istry of Foreign Economic Relations, and the Ministry of Economics 
over the desirability of certain nuclear exports to Iran and India. 

A potential for conflict of interest and export control abuse also 
arises for the tendency of the head of the Export Control Commis- 
sion, which was created last year, to also direct the Commission for 
Military and Technology Cooperation, a formerly secret body whose 
mandate is to promote the export of defense items. The danger of 
efforts to emasculate the Export Control Commission is heightened 
by the fact that the entire Russian export control structure contin- 
ues to derive its legal base from executive decrees rather than par- 
liamentary legislation. 

THE BRAIN DRAIN 

In addition, poor pay, alternative employment opportunities in 
the private sector, and the perception of a reduced impact on policy 
outcomes are leading to a brain drain from the Ministry of Econom- 
ics and the Ministry of Foreign Affairs. Such an exodus will clearly 
impede the development and implementation of sound nuclear ex- 
port and nonproliferation policy. 

The economic and political constraints under which the Russian 
export control system functions are evident in the decisions appar- 
ently sanctioned by the new Export Control Commission to sell 
Iran two nuclear power reactors and to provide China with nuclear 
assistance including reactors and possibly an uranium enrichment 
plant. 



61 

Russia previously had concluded a similar deal with India which 
collapsed when Russia was unable to provide the credit promised 
by its predecessors. It appears to have pursued reactor sales with 
Pakistan and possibly Algeria. Although these sales do not violate 
Russia's NPT commitments or other formal nonproliferation obliga- 
tions, they are at odds with prudent nuclear export policy. They 
also have the effect of encouraging other Soviet successor states to 
subordinate nonproliferation objectives to those of economic gain. 

Notwithstanding certain shortcomings, Russia generally has 
taken positive steps to regulate nuclear exports. However, these ac- 
tions are under-minded by the absence of parallel export control 
bodies and procedures in the non-Russian Republics. 

As a consequence, one confronts the problem of the "weakest 
link." That is, even if controls are in rather good shape in Russia, 
the absence of controls on trade and transit between Russia and 
other successor states means that heavy water, beryllium, uranium 
oxide, and other controlled commodities can pass to the CIS point 
of least resistance and from there to countries of proliferation con- 
cern. This problem is likely to be compounded if a proposed "Com- 
mon Customs Zone" for the CIS is actually implemented. 

SOME POSITIVE DEVELOPMENTS 

So far I have emphasized the negative side. There is a lot more 
I could do about this if time permitted, but there also are some 
promising developments. Belarus is poised to receive major U.S. ex- 
port control assistance and Ukraine has made some important 
strides by creating a new export control structure no longer hostage 
to the Ministry of Conversion and the remnants of the old Soviet 
military industrial complex. 

I initially planned to comment on the danger of nuclear 
mercinaries from the former Soviet Union. Rather than make those 
remarks orally, I refer you to my prepared testimony. 

Let me simply note that we face a problem in the nuclear com- 
plex of the former Soviet Union that is apparent in recent strikes 
and greatly increased job turnover figures. There is a substantial 
migration of the nuclear work force, most of it involving younger 
people and much of it to the private sector. That has had the effect 
of complicating efforts to monitor nuclear scientists and raises 
doubts about lab spokesmen claims that no employees have sold 
their services abroad. 

U.S. POLICY RESPONSES 

Let me turn to the issue of appropriate U.S. policy responses. 
While there is little evidence that militarily significant nuclear ex- 
ports from the newly independent states have taken place, condi- 
tions there are ripe for export control abuse. Massive stocks of 
weapons grade materials, underemployed nuclear experts, 
unsafeguarded nuclear facilities, desperate demands for hard cur- 
rency, and general governmental disinterest and disregard for the 
control of nuclear-related products require corrective action. 

A number of useful recommendations have been made over the 
past year, although their implementation has been less than suc- 
cessful. Rather than enumerate those, I will turn to four additional 
things that I believe should be done. 



62 

U.S. leverage in nuclear negotiations wdth the Soviet successor 
states in the past has been undercut by repeated unfulfilled prom- 
ises. To regain some measure of credibility, Washington must expe- 
ditiously use funds already allocated by Congress to reward nuclear 
export and nonproliferation restraint. As of last Friday, September 
9, only $52 million — less than 7 percent of the $800 million author- 
ized by the Nunn-Lugar legislation — ^had actually been expended. 
It is imperative now to stop interagency squabbles and to make 
money available immediately to Belarus to reward its nonprolifera- 
tion restraint. 

I believe that recent action by the U.S. Department of State and 
the Department of Energy are encouraging in this respect. Indeed 
an export control short course is being conducted in Minsk this 
week. 

Money also could be profitably used to establish a longer term 
model export control training center in Minsk. The center could ac- 
commodate trainees from throughout the former Soviet Union and 
might serve the additional nonproliferation purpose of stemming 
the potential brain drain by retraining scientists from the nuclear 
weapons establishment in the related field of nuclear export control 
and safeguard procedures. 

Means also must be found now to provide Ukraine with assist- 
ance in the area of export controls and nuclear safety. U.S. policy 
which links provision of this assistance to conclusion of the so- 
called umbrella agreement no longer makes sense, and indeed un- 
dermines the positions of the few organizational actors in Ukraine 
which support nonproliferation restraint. Timely provision of mate- 
rial assistance to organizations such as the Expert-Technical Com- 
mittee and the State Committee for Nuclear and Radiation Safety, 
on the other hand, may enhance their bureaucratic influence while 
lessening the risk of nuclear reactor mishaps and export leakage. 

The focus of efforts to shore up the difficult situation in Ukraine 
should not lead us to ignore the nuclear export and nonprolifera- 
tion problems in Kazakhstan, Russia and the other successor 
states. Significant anti-NPT sentiment and an inclination to export 
anything to anyone for the right price is present, if less visible, in 
Kazakhstan. Moreover, support for the NPT could wane in Russia 
if Ukraine disavows its NPT pledge. 

The presence on the territories of Kazakhstan, Kyrgyzstan, 
Tajikistan and Uzbekistan of a variety of nuclear materials, equip- 
ment, technology and technical expertise is not reason for great 
anxiety over indigenous nuclear weapons programs in Central Asia. 
However, there are growing economic incentives in the region to 
sell sensitive products abroad. 

It therefore would be desirable for the United States to apply a 
portion of the funds earmarked for denuclearization and export 
control assistance to successor states other than the big four. I 
have in mind, in particular, assistance for Kyrgyzstan and 
Uzbekistan. 

Estonia, Kazakhstan, Ukraine and other nuclear successor states 
with nuclear export capabilities should be encouraged immediately 
to join the Nuclear Suppliers Group. At a minimum they should be 
invited to participate as observers at Nuclear Suppliers Group 
meetings. The engagement of these states in the international ex- 



63 

port contrpl process is important not only as a means to share tech- 
nical information and secure policy commitments, but as a vehicle 
to create internal institutional mechanisms within the governments 
with responsibility for nuclear export controls. 

THE U.S. MUST EXERCISE RESTRAINT IN DUAL-USE EXPORTS 

Finally, let me argue that U.S. efforts to encourage nuclear ex- 
port restraint in the states of the former Soviet Union are under- 
mined by the perception that Washington does not practice what 
it preaches. The litmus test for the Clinton administration's com- 
mitment to nonproliferation will be its own self-restraint in dual- 
use exports, the consistency with which it applies nonproliferation 
standards, and, from the viewpoint of officials in Moscow, Kiev and 
other foreign capitals, the extent to which it is prepared to forgo 
nuclear testing and reduce its own nuclear arsenals. 

To date the international community has been fortunate to avoid 
a flood of illicit nuclear exports from the former Soviet Union. But 
this luck is unlikely to continue indefinitely. Unless steps are taken 
promptly to enhance the capability of the newly independent states 
to control nuclear exports and to alter the balance of incentives and 
disincentives to export sensitive nuclear goods and services the 
next sensationalist headline about black market nuclear activity 
may well turn out to be true. 

Thank you. 

[The prepared statement of Mr. Potter appears in the appendix.] 

Mr. Lantos. Thank you very much, Mr. Potter. 

I know you need to leave. Thank you for a very substantive and 
meaningful testimony this afternoon. 

Next we will hear from Stephen D. Bryen, President of 
Deltatech, and former Deputy Undersecretary of Defense for Trade 
Security Policy. Your prepared statement will be entered in the 
record in its entirety. You may proceed in any way you choose. 

STATEMENT OF STEPHEN D. BRYEN, FRESmENT, DELTATECH, 
AND FORMER DEPUTY UNDERSECRETARY OF DEFENSE FOR 
TRADE SECURITY POLICY 

Mr. Bryen. Thank you, Mr. Chairman. 

Given the lateness of the hour, I would like to come directly to 
the point if I can. I was very impressed with your opening re- 
marks — depressed and impressed. Depressed because it is deja vu. 
I have seen this happen before, certainly with respect to Iraq in the 
late 1980's and before the invasion of Kuwait. 

I don't think what is going on today is very much different than 
that, despite the fact that a great deal of effort has been made by 
the State Department and other agencies of the U.S. Government, 
domestically and internationally, to try and do something about the 
problem of proliferation. 

There is a difference between what we call dual-use technology 
on the one hand and specific military types of goods like enriched 
uranium on the other hand which could be smuggled out of the 
former Soviet Union or supplied from other countries, from China, 
for example. 

I think that is a real threat; but you still need to have the deliv- 
ery systems and the mechanisms to use even the uranium that you 



64 

might steal. The pattern that occurred in Iraq is now occurring in 
Iran and elsewhere, in some cases with the same companies. And 
that is to acquire, largely from the West, dual-use industrial ma- 
chinery, machine tools, special kinds of furnaces, all kinds of de- 
vices to build the weapons and the delivery systems for those weap- 
ons. And that is what the concern is. That is the risk, that is the 
risk to our security and it certainly poses a regional risk as well. 
The question is how to get at that problem. I don't pretend to 
know the whole answer, but I think I have a few ideas that might 
be useful to this committee in its consideration of how to proceed. 

PRIOR AI'PROVAL IS A KEY TO ANY MULTILATERAL EXPORT LICENSING 

SYSTEM 

I think the greatest single weakness in today's system of tech- 
nology controls is the true lack of international coordination. The 
old COCOM system which was created in 1949 and became the 
means through which Western NATO countries controlled tech- 
nology to the Soviet Union and its Warsaw Pact allies had one spe- 
cial feature that is not found in any other control regime missile 
tech or chemical weapons control regime. In COCOM important ex- 
port licenses had to be looked at by each member country. Each 
had to bring its proposed export to the fiill group of 16 countries 
get their approval, their positive approval. 

That single thing was the reason why it was possible to coordi- 
nate and manage an export control program that had some chance 
to succeed. You don't have that with respect to proliferation. Each 
country is completely on its own. The United States does what it 
does, the British and Germans do what they do, and everybody 
does a lousy job, and that is the bottom line. 

You have published a list today of companies and their activities 
that you know about. I submit that there are probably thousands 
of activities you don't yet know about and you will read about to- 
morrow and the next day and the next day. Or God forbid if there 
is another conflict, say in the Persian Gulf, the U.N. will go in 
there and clean up the mess and you will see that junk lying 
around after we bombed it. 

There must be a better way. I think our political leadership in- 
stead of just making speeches about proliferation, will have to get 
our allies to the proposition that we should agree on a system of 
control that has some chance to succeed, where we coordinate li- 
censes, where we reveal what we are going to do and get the con- 
sensus of the others. 

If the consensus is that it is risk free and there is no danger, I 
think we have to accept that. But if the consensus is that there is 
a problem or that it shouldn't go, the export has to be held back. 
That means leadership on the U.S. side. Leadership is sometimes 
easy to come by, sometimes hard to come by, but it is not just come 
by through speeches. We have to do the job and clean up our act. 
We can't go on approving cruise missile technology to China and 
at the same time complain about the Chinese selling missiles to 
Pakistan and then imposing a unilateral punishment which will be 
broken immediately by our allies because they are not obliged to 
follow it. 



65 

This sends the vsTong message to everyone. It sends a message 
to the Chinese that we are not very serious about the missile tech 
violations. It sends the same message to our allies and it encour- 
ages other companies to sell whatever they have to sell with very 
little fear that there is any particular risk. So I think coordination 
and the political effort by the United States cleaning up our own 
process here are two very important steps. 

In my prepared remarks I go into one other aspect. When we had 
an Export Control program operating effectively, I think as effec- 
tively as it could with respect to the Soviet Union, we also had a 
defense program that was operating effectively. A control scheme 
no matter how good it is won't ultimately be enough. You have to 
have some way of challenging anyone who would acquire and 
threaten to use weapons of mass destruction. 

I think we did it, by the way, with respect to Iraq, but not with- 
out some difficulty. We found in that example that we had to make 
do with partial solutions, had to use systems that were not exactly 
appropriate, the Patriot being a good example. Our troops weren't 
fully prepared. Even at the last minute we were ordering chemical 
weapons antidotes from even manufacturers in Maryland to be 
shipped out in a hurry so the guys would have something to protect 
themselves with. That is not the right way to do business. 

A CONCENTRATED COUNTERPROLIFERATION EFFORT 

We need a concentrated counterproliferation effort in our defense 
programs, and real focus on it, and I think it should be a separate 
part of the defense budget and a separate focus with separate lead- 
ership to look into it and make sure that we have a comprehensive 
program and make sure those who want to acquire these weapons 
know we do, because there is a real benefit to being able to threat- 
en proliferations if they get out of line. 

I consider the risk of proliferation real. You only have to look at 
the example of what was going on in Iraq to understand it is real. 
We were happily a year or two ahead of Saddam Hussein's success- 
ful completion of his nuclear program. We were lucky that he blun- 
dered. 

A few years later and the invasion of Kuwait might have looked 
very different had he been a nuclear power by then. Whether we 
would be willing or could have taken that sort of risk, I don't want 
to speculate. But we do need to have an effective, comprehensive, 
counterproliferation program that includes a good, solid, defense 
program aimed in that direction. 

There are three main points: we need a coordinated export con- 
trol system that includes coordination of licenses with our allies. 
We need political effort to clean up the problem at home and set 
an example. And finally, we need a focus oh our defense programs 
that includes a real counterproliferation effort for our national se- 
curity. That is the burden of what I have to say and thank you. 

Mr. Lantos. Thank you. 

[The prepared statement of Mr. Bryen appears in the appendix.] 

We will now hear from Joseph Bermudez, Jr., a leading specialist 
in the field of ballistic missile proliferation. 



66 

STATEMENT OF JOSEPH S. BERMUDEZ, JR., SPECIALIST IN 
BALLISTIC MISSILE PROLIFERATION 

Mr. Bermudez. Thank you, Mr. Chairman. 

First I would Hke to thank you for allovsang me this opportunity 
and I would like to apologize ahead of time oecause I have never 
been good at oral presentations. The nuns in grammar school will 
testify to that. 

North Korea and China are by far the most significant 
proliferators of ballistic missiles today. Up until the mid-1980's, the 
Soviet Union was the major supplier of ballistic missiles to the 
Middle East with its ubiquitous Scud B. 

During the next few minutes, I will discuss both China's pro- 
grams and their efforts and North Korea's. China became an im- 
portant source of ballistic missile technology for proliferating coun- 
tries during the 1980's. It is an attractive supplier both because of 
its extensive technology base in ballistic missiles and because it is 
willing to sell. 

China has sought foreign military sales for several reasons, prof- 
it, political influence and significantly to subsidize development of 
ballistic missiles within its country for its own use. Currently 
China deploys several ballistic missile systems, including the 2,800 
kilometer range DF-3, the 4,700-kilometer DF^ and the 12,000- 
13,000-kilometer DF-5. Currently China is pursuing work on a 
number of more modem more sophisticated systems or capable sys- 
tems, notably the DF-25, DF-31, and DF-41. 

These systems are scheduled to come on line in the mid-1990's 
through the late 1990's. To date China is known to have provided 
intermediate range ballistic missiles or technologies to only one 
country, Saudi Arabia. During 1985, a major arms agreement was 
concluded between Saudi Arabia and China and deliveries of the 
missiles were begun in 1987. 

Saudi Arabia has never employed its DF-3's. The missiles how- 
ever were placed on operational alert during Operation Desert 
Storm. Additionally, Saudi Arabia has not retransferred any DF- 
3 missiles or technologies. 

Following the public revelations of the sales which occurred some 
time during 1987-1988, Libya approached China seeking DF-3's 
but fortunately for us the negotiations were not successful. In addi- 
tion to these longer-range systems, China has sold or is marketing 
three shorter-range systems, the 600-kilometer M-9, the 300-kilo- 
meter M-11 and the 300-kilometer 8610. 

To date, China is known to have transferred short-range ballistic 
missiles anJ manufacturing technologies to a number of countries 
in the Third World. Iran has received the 8610 missile and manu- 
facturing technology, the M-9 and the M-11 manufacturing tech- 
nologies as well as technical assistance, which it needs desperately 
for its missile programs and its rocket artillery programs. 

Libya has negotiated for M-9 missiles ana manufacturing tech- 
nologies as well as Chinese technical assistance for their indige- 
nous program. At present, however there are no reliable open 
source indicators of any significant Chinese involvement in Libya. 

Pakistan has concluded a agreement with China to purchase 
both M-9 and M-11 missiles and technologies. The status of these 
present agreements is unknown. Pakistan is however known to be 



67 

covertly receiving manufacturing technologies and components 
from China. 

Syria originally had concluded an agreement with China also for 
both M-9 missiles and for manufacturing technologies. However, 
due to international pressure especially from the United States, 
both the M-9 missiles and manufacturing technologies were with- 
held from Syria. They were, unfortunately, replaced by a series of 
programs wnich actually circumvented it. 

These agreements called for North Korea to provide Syria with 
Scud Mod-C missiles and manufacturing technology, Iranian co- 
operation and technical assistance for Syria and Chinese technical 
assistance. So the Chinese were able to get around the letter of the 
law and the Syrians were able to get their missiles. 

NORTH KOREAN MISSILE DEVELOPMENT 

A few comments about North Korea's missile program. North Ko- 
rea's involvement in the field of ballistic missile dates to the mid- 
seventies. However, it wasn't until later that it was able to over- 
come serious shortcomings in manpower and technology to produce 
its first ballistic missile, known as the Scud Mod-B. This system is 
a reverse engineered version of the Soviet Scud B. 

The pattern examples for the new missile were provided by 
Egypt in the early 1980's. Thus North Korea's missile program can 
be said to owe its original success to the Middle East. As I read 
the rest of the North Korean section, I apologize for the confusion 
that might arise because of the terminology used for the missiles, 
but there is no other way to get around it. 

North Korea's program accelerated dramatically around 1985 
when as a result of the Iran-Iraq war, the Iranian Government 
agreed to provide North Korea with funding for its missile program 
in return for the purchase of the soon-to-be produced Scud Mod-B. 

Due to a number of minor modifications in the production proc- 
ess, the North Korean version is able to deliver a warhead slightly 
further than the standard Soviet version. Its 320-kilometer range 
is slightly greater than the 280. During July 1987, the first North 
Korean-produced Scud Mod-B's arrived in Iran. These missiles 
were subsequently to play a significant role within the War of the 
Cities. 

During that battle, the Iranians launched approximately 80 of 
the 100 or so provided by the North Koreans. Concurrent with the 
delivery of the missiles and the War of the Cities, North Korea pro- 
vided assistance to Iran in establishing a facility to assemble the 
Scud Mod-B within Iran. During the late 1980's, North Korea reor- 
ganized its missile program to produce two new systems with 
greater capabilities, the 500-kilometer range Scud Mod-C and the 
1000-kilometer, 13,000-kilometer Scud Mod-D commonly known in 
the press as the Nodong or the Nodong 1. 

The Scud Mod-C is an extended range variant of the original 
Scud, while the D is believed to be a completely redesigned system 
that is based upon Scud technology. 

During the late nineties, the Scud Mod-C entered production and 
North Korea agreed to sell the new missile to Iran and to assist 
in its conversion of a facility to first assemble it and then produce 
it within Iran. Shipments began to Iran some time in January 



68 

1991. The exact number of missiles provided directly to the Ira- 
nians is not presently known, however estimates suggest around 
100. maybe 150. 

Tne Iranian deliveries were soon followed by a series of inter- 
related agreements to provide the Scud Mod-C's to Syria. Deliveries 
of an estimated 60 missiles and 12 launcher to Syria began during 
April 1991. Additionally, Libya has displayed an interest in pur- 
chasing the North Korean Scud Mod-C, but there is no evidence 
that North Korea has shipped any of these missiles to Libya. 

Design of the longer-range Scud Mod-D is believed to have begun 
in 1989 and proceeded at a much slower pace. The first prototypes 
are believed to have been completed earlier this year and were re- 
cently tested for the first time during May. The range of the new 
system is probably 1000 to 1300 kilometers. We often hear the fig- 
ure of 1000 plus, but it is closer to 1300, best estimate, which gives 
the North Koreans the ability not only to strike anywhere within 
the Korean peninsula, but they will be able to hit Tokyo, and 
Osaka, Japan Khabarovsk in Russia, Beijing and Shanghai in 
China, and Taipei in the Republic of China, a pretty long reach for 
a very small country. 

There is considerable international concern over the Scud Mod- 
D. Iran, Libya and Syria have all displayed an interest in obtaining 
the missile or the technology to produce it. Iran, however, appears 
to be the chief client, having sent a delegation to witness the recent 
tests. Deployment of the Scud Mod-D by Iran would allow it to 
strike all of our main allies in the region. 

NODONG 2 

Some sources suggest that North Korea is developing a 1500- to 
2000-kilometer follow-on to the Scud Mod-D logically called the 
Scud Mod-E or in the press Scud X or Nodong 2. 

If this is correct, this system is most likely only to be in the de- 
sign stage at present, will not be seen in prototype stage until 1995 
or after. One of the primary reasons for the long development pe- 
riod with North Korea's extended range missiles is that in order to 
achieve ranges on the order of 1500 to 2000 kilometers using Scud 
technology you need to use clustering or multistaging, both tech- 
nologies that the North Koreans have limited or no experience in. 

The recent incident in which a number of Russian designers were 
stopped from traveling to North Korea is noteworthy. The person- 
nel that were stopped were from the Makeyev Design Bureau 
which was responsible for Scud design and Scud improvements 
within ilw Soviet Union. These people had the technology and ca- 
pability to address North Korea's shortcomings in clustering and 
multistaging. 

Before concluding, please allow me to comment on export con- 
trols. The effectiveness of export controls in containing ballistic 
missile proliferation within the Third World is somewhat problem- 
atic. It is clear that these controls presently have not stopped pro- 
liferation. 

It would be a mistake however to assume that these controls are 
totally ineffective. The crux of the problem is that as long as na- 
tions perceive the need for ballistic missiles they will seek to pur- 
chase or produce them. We should remember tnat the technology 



69 

to produce the Scud is based on 50-year-old technology on the Ger- 
man World War II V-2 weapons. This technology is available to ev- 
eryone. It is certainly available to countries like North Korea. 

We know however that many countries including North Korea 
are pursuing programs which require greater technology which is 
not as accessible. Our experience with the multinational Condor 
program has shown that such programs are much more vulnerable 
to external constraints. The fact that we cannot stop proliferation 
doesn't mean that we shouldn't try or that we can ignore the issue. 

It is better to have a number of nations with short range crude 
unreliable systems than the same nations to have long range, accu- 
rate and reliable systems, the lesser of two evils. It is clear that 
the threat of ballistic missile proliferation in the Third World is 
real. The dangers to the United States and its interests are in- 
creasing. This threat must be met in a forthright intelligent and 
creative manner. 

Thank you, Mr. Chairman, 

[The prepared statement of Mr. Bermudez appears in the appen- 
dix.] 

Mr. Bereuter. Mr. Chairman, I wonder if Mr. Bermudez could 
tell us in general terms about the source of your information? 

Mr. Bermudez. In general terms, I had an opportunity to speak 
with many people, both within this government and other govern- 
ments both in intelligence agencies and diplomatic arenas, plus I 
have been studying the problem for close to 15 years. 

Mr. Bereuter. Thank you. 

Mr. Bermudez. If you have a question about a specific item, I 
will be glad to discuss it in private. 

Mr. Lantos. Very good. 

Our final witness is Mr. Ramon Marks, Sr., partner of Marks & 
Murase and a specialist in this field. We are happy to hear fi-om 
Mr. Marks. Your prepared statement will be entered in the record 
in its entirety. You may proceed in any way you choose. 

STATEMENT OF RAMON P. MARKS, ESQ., SENIOR PARTNER, 

MARKS AND MURASE 

Mr. Marks. Thank you, Mr. Chairman. 

I will make general comments based on my testimony at the 
hearing today. You have asked me to comment on the effectiveness 
of sanctions laws as a tool for encouraging multilateralism on pro- 
liferation efforts. I think there is a great deal of confusion over the 
role. A case in point is the administration's recent actions against 
China under the Missile Tech Control Regime involving the ship- 
ment of M-11 technology to Pakistan. 

These sanctions were invoked pursuant to section 11 B of the Ex- 
port Administration Act and will probably result in the loss of $1 
billion worth of business for Hughes Aircraft. That is $1 billion 
worth of jobs for Americans and for the American economy. 

What I would like to point out to the chairman and to the sub- 
committee today is the fact that Aerospatiale, British Airspace and 
Alcatel are perfectly capable of selling that technology to the Chi- 
nese. It is only reasonable to assume that they probably will unless 
a miracle occurs and the State Department is successful in arm 



70 

twisting tactics with our colleagues. My point is that these are not 
sanctions directed against China. 

These are sanctions directed against Hughes Aircraft and the 
U.S. economy unless we can somehow keep foreign companies from 
jumping into the breach and taking the opportunity. 

Another example is the administration's recent decision with re- 
gard to Boeing. Again I understand that at the strong insistence 
of the State Department it was decided that Boeing should not sell 
aircraft to Iran. That may well be an excellent decision. 

The problem is, as we speak, Airbus is busily taking out U.S. 
technology from its aircraft to try to craft airplanes that they can 
then sell to the Iranians without any U.S. technology. If Airbus 
gets the deal and Boeing doesn't, Mr. Chairman, my question is 
who has been sanctioned, Iran or Boeing? 

I do believe that this is a significant policy problem. It deserves 
scrutiny by your subcommittee, Mr. Chairman, and I think U.S. 
business is right; why should they exercise forbearance if others 
don't? 

The real challenge is how to make any proliferation policy on ex- 
port controls and sanctions truly multilateral. I believe there is a 
potential legislative solution to this problem, Mr. Chairman, based 
on my own experience as a lawyer practicing in this area. 

THE NEED FOR IMPORT SANCTIONS 

We have only to look at a very obscure provision of current U.S. 
export control laws to see the potential seeds of a new concept that 
could put real teeth into the ideas of multilateralism. You will re- 
call that back in 1987 the strong sanctions were voted by the Con- 
gress. They had a very dramatic effect. 

I think the other countries now have better export control pro- 
grams, in large measure, I think, thanks to the initiative of Con- 
gress in passing that legislation, which got attention. Along with 
those sanctions provisions, there was a little noticed law that came 
along with it, section 11(a). It provided that any future COCOM ex- 
port control diversions by foreign persons could be subject to sanc- 
tions. 

In other words, if any foreign company violated, in the judgement 
of the U.S. Government, COCOM-based export controls, then the 
U.S. Grovernment could institute sanctions blocking exports into the 
United States for up to 5 years. 

Mr. Chairman, I would submit that it might be an excellent idea 
to consider, as part of an improved the counterproliferation pro- 
gram, new legislation along these lines, that expands beyond 
COCOM. Why not make such applicable to NPT, to Missile Tech, 
to Australia Group, to all of the multilateral control regimes? This 
would go against the idea that we are behaving unilaterally. 

We would only make these potential import sanctions applicable 
under multilateral agreements. 

Let me turn back to the examples at the start of my testimony, 
Mr. Chairman. We decide we have just got to do something about 
China and these M-11 shipments. We tell Hughes you lose $1 bil- 
lion worth of business. Let's assume an European company jumps 
in and grabs the $1 billion worth of business. 



71 

You hold hearings, you inveigh on the State Department to arm 
twist, please do something about it. But before that your committee 
and the Congress and the President had signed legislation allowing 
for import sanctions. Well, under that law, if the European com- 
pany sold the technology to the Chinese that we blocked Hughes 
from doing, Hughes would have the right to come in and the U.S. 
Government would have the right to come in and say that company 
loses its right to sell its products in the United States for a period 
of time. 

Whether it is 2 years, 5 years, 6 months, I submit that the very 
shock value, the deterrent value of having that type of legislation 
on the books could dramatically change the picture and I think we 
would have a perfect right to make that argument. If we told 
Hughes they can't sell, if we are engaging in sales sacrifice under 
a multilateral regime, why should we then feel uncomfortable 
about telling a foreign company you may lose your right to do busi- 
ness in this country for awhile. 

We have the right to restrict exports out of this country. 

Mr. Chairman, the Congress and the President under the Con- 
stitution, have the right to restrict imports into the country as well. 
I think it can be a two-way street. There is nothing unfair about 
that. 

Mr. Chairman, let me move on. You also asked me to comment 
today on existing policy tools for preventing proliferation of weap- 
ons of mass destruction. On this score, I would like to focus on one 
law in particular with which, because of my practice, I have had 
to deal extensively and that is the Iran-Iraq Arms Proliferation Act 
of 1992. 

I was very interested to hear your opening statement, Mr. Chair- 
man. Let me say that from a legal point of view your comments 
concerning the question of whether that law has been properly en- 
forced by our Government were right on point. As an attorney, I 
would tell you that in my opinion we are not enforcing that law. 

We have permitted unlawful exports to Iran to occur and I will 
explain to you in lawyer's terms, in technical terms precisely why 
I have arrived at that conclusion. Specifically, section 1603 of the 
Iran-Iraq Act expressly requires that all export controls prescribed 
against Iraq under the Iraq Sanctions Act of 1990, and I am quot- 
ing now Mr. Chairman, "shall be applied to the same extent and 
in the same manner with respect to Iran." 

Mr. Chairman, we all remember we took strong action against 
Iraq; strong action. We decided that all dual-use technology based 
either on foreign policy or national security controls cannot go to 
Iraq. 

U.S. EXPORTS TO IRAN WERE ILLEGAL 

The Congress passed this law, Mr. Chairman. It was signed into 
law by the President of the United States on October 23, 1992, as 
you said. 

Since that time, numerous exports, millions of dollars of exports, 
have been licensed by our Government of items that are on the 
commodity control list as foreign policj' or national security con- 
trols, and they have been allowed to go to Iran. 



72 

The subcommittee asked me to review a list, indicating the possi- 
bility that G-Dest items have been hcensed for Iran. 

Mr. Chairman, almost everything on the commodity control list 
ends up there in theory based on controls. The statutory language 
is clear. I argue cases in the court all the time. I would be perfectly 
comfortable arguing to a U.S. Federal district judge that those ex- 
ports were not legal in light of the statutory language. 

Let me add, Mr. Chairman, one other point. I understand that 
the Commerce Department follows a contract sanctity policy. They 
include language, a savings clause saying that any contracts 
passed before the effective date of the law can go ahead and be li- 
censed. And my understanding is Commerce has done this. In fact, 
I underlined your testimony. You indicate that approximately $11.6 
million worth of such exports have been licensed to Iran. 

Mr. Chairman, the Iran-Iraq Act contains no contract sanctity 
provision. Mr. Chairman, the parallel statute, the Iraq Sanctions 
Act of 1990, on which it is closely patterned and based, does con- 
tain such a contract sanctity provision. 

Mr. Chairman, under the standard rules of statutory construc- 
tion that lawyers follow, if one statute has a contract sanctity pro- 
vision, then if this Congress has intended to allow contract sanctity 
with respect to exports to Iran, it would have included similar lan- 
guage in the Iran-Iraq Act. It didn't. 

So I have serious questions. And, frankly, I find the situation in 
the wake of Iraqgate, as we came to call it, somewhat surprising. 
We have a situation today with Iran that is chillingly similar to 
what we faced with regard to Iraq several months before the Gulf 
War. We have Iranian troops massed on the Azerbaijani-Iranian 
frontier. Even worse we have the allied NATO troops massed on 
the Turkish frontier. We have a government that has been licens- 
ing exports to Iran. But this time the situation may be even strong- 
er than it was with Iraq. At least to me it appears those licenses 
have been in direct contravention of U.S. export laws. 

Imagine the outcry, and imagine the furor that is going to erupt, 
Mr. Chairman, if the worst case occurs and fighting start involving 
a NATO ally, Iran and a former Soviet Republic. 

Imagine the recriminations that are going to occur, the press cov- 
erage, the hearings that are going to occur in Congress, and the 
speeches on the floor about our Iranian export policy, and what 
about this law that we passed to try to learn the lessons of Iraq 
and apply them to Iran. 

Mr. Chairman, I am no fan of unilateral controls. I am no fan 
of United States blocking exports to Iran when our allies do not, 
but we want to block exports to Iran, then let's pass some legisla- 
tion that can slam the door on the Europeans or whoever else tries 
to jump in and take advantage of our forbearance. 

And at the same time, I think we need to do something. There 
are some loopholes in the Iran-Iraq Act. The biggest loophole is the 
failure to enforce the law. 

Thank you. Those conclude my remarks. 

[The prepared statement of Mr. Marks appears in the appendix.] 

Mr. Lantos. Thank you to all three of you, and I would like do 
begin with Congressman Bereuter. 



73 

Mr. Bereuter. I think the testimony was very interesting and 
very disturbing. I regret that I am not going to have the oppor- 
tunity to stay around and pursue the questions, but I particularly 
appreciated your remarks, Mr. Marks. They were very specific 
about the areas of law that you think are being violated. 

Is that a part of your written statement as well? 

Mr. Marks. Yes, it is sir. It is in the full written statement, and 
I lay it out in legal terms in my prepared written remarks. 

Mr. Bereuter. Thank you, Mr. Chairman. I defer to you. 

Mr. Lantos. Mr. Marks, your testimony is very provocative. Are 
you suggesting that the breaking of the law is currently going on 
on the tenure of Ron Brown as Secretary of Commerce? 

Are these current developments, or are these developments of the 
period prior to January 20th? 

Mr. Marks. Mr. Chairman, I believe that this has been going on 
since the law was passed October 23, 1992. And for better or for 
worse, it is a bipartisan problem. It has been going on continuously 
out of that department since that time. I have seen no change in 
the trend. 

Mr. Lantos. You have seen no change in the trend? 

Mr. Marks. No, Mr. Chairman. 

Mr. Lantos. You have called elsewhere for American companies 
to be given private right of action. What are the arguments against 
this? 

You made a very compelling case for this approach. What are the 
arguments against it? 

Mr. Marks. Mr. Chairman, now you are really asking me to be- 
have like a lawyer and to abruptly change sides and argue against 
the position that I personally espouse. 

Mr. Lantos. Just part of your nature as a lawyer. 

Mr. Marks. I find it particularly objectionable since I wasn't 
warned what the questions were going to be. 

I would say that the types of ideas that I am suggesting are — 
will create confusion. They will create controversy, they will create 
friction between ourselves and our allies. And I think that what the 
State Department tries to do is to address the problem smoothly 
through diplomatic conversations, negotiations. They will sit down 
at the Quai d'Orsay and say, come on, can't you do something 
about this, slow this up, stop this? Look at the attention that it is 
receiving in press. 

And I think many would argue that is the better approach, that 
this sort of harsh statutory Congress ramming a law down the 
lines of Toshiba is ultimately harmful to foreign policy. And we 
would defer to the President's constitutional authority to run for- 
eign affairs and to get the job done as God gives him the light to 
see that job. 

And these statutory handcuffs are just going to cause trouble, 
and the Germans or the Belgians or the Dutch or the French are 
going to slam import controls on our products. More than likely it 
would be the Chinese, and they would impose import sanctions on 
us. 

Mr. Lantos. Do either of you have any comment on this issue? 

Mr. Bermudez, in your judgment, does North Korea have a nu- 
clear weapons capability at this time? 



74 

Mr. Bkrmudez. Loaded question. 

Mr. Lantos. I think it is a very straightforward question. 

Mr. Bkrmudez. That is right. It has the capability, the techno- 
logical capability to produce a bomb. In my opinion there is little 
doubt of tnat. 

Whether it has enough fissile material in the form of plutonium 
is the question; and whether it has extracted that plutonium into 
one place, one batch, to be used and milled into weapons form is 
what is debatable. 

The other side of the coin, which is very rarely discussed, is if 
North Korea has been pursuing an enriched uranium program as 
opposed to just a plutonium program, then it certainly could have 
enough enriched uranium to produce a bomb. 

As far as building a bomb, there is little doubt that North Korea 
has the technological capability to do that. It might be crude or 
dirty by our standards, but it has the technological capability to do 
so. Whether it has the fissile material, we really don't know and 
the North Koreans aren't telling us. 

Mr. Lantos. Mr. Bryen, you have been working in this field for 
many years and you must have found as frustrating as I do that 
our allies refuse to embargo high-technology sales, say to Iran. 

Having seen this in an official capacity and now in a private ca- 
pacity, what suggestions would you have for our policymakers to 
deal with this? Because, clearly, most of them are aware and would 
like to deal with this. 

Mr. Bryen. I think they would like to deal with it. I don't have 
any doubt of the goodwill on the subject is there. I think it is a 
question of figuring out what is going to bring results. 

CLEAN UP THE U.S. EXPORT LICENSING SYSTEM FIRST 

We had the same problem in the early 1980's with the allies with 
respect to Soviet issues as we have in respect to Iran or other coun- 
tries today. 

What got their cooperation? I think, first of all, our determina- 
tion to clean up our own export licensing system first. If they be- 
lieve that we are just doing this for the front page of the newspaper 
and we are not serious, then it is unlikely that you will see Grer- 
many or France or England or anybody else really impose tough ex- 
port controls on their customers, given their sensitivity about their 
economies and all the other political issues. 

If, however, we set an example, we are going to be hard nosed 
about this and that we are going to tell them to oe good allies, they 
will have to cooperate on this front. Then I think you will see a dif- 
ferent result. I think that is the bottom line that you have to do 
it first ourselves. 

I spoke in my testimony about China sanctions and about ex- 
ports to China of cruise missile technology, supercomputers. If you 
are a European watching that, you are going to be awfully cynical 
the next time some American official comes around and asks you 
to restrain an export. 

Mr. Lantos. How advanced are the contacts between Libya and 
North Korea for ballistic missile sales? 

Mr. Bermudez. At present, we have — and I addressed it in my 
written statement — indications that the Libyans have had prob- 



75 

lems with their indigenous program and as a result approached 
North Korea initially for Scud Mod-Cs. 

There is no evidence right now that the North Koreans have pro- 
vided them with any missiles or technology. However, it appears 
that the Libyan thrust now is for the North Korean in their Scud 
Mod-D. The missile itself has just gone into testing in May. 

The North Koreans launched four, of which only one landed 
where we expected it to land. The other three landed elsewhere. So 
the status of the missile itself is somewhat questionable. It is be- 
lieved, at least at present, that Libya is trying to or is seeking to 
acquire this missile when it is produced. 

Mr. Lantos. What is our best estimate of how long it will be be- 
fore Iran goes nuclear, given the present pace of their effort? 

Mr. Bermudez. If you are addressing that question to me 

Mr. Lantos. I am addressing it to all of you. 

Mr. Bermudez. I would defer that question to Dr. Potter first. 

Mr. Bryen. Who has left. The growth in technology there is simi- 
lar to Iraq. All the official estimates on Iraq were wrong. We know 
that now. Who is to say? Five, 10 years. In reality, it was a couple 
of years. They are probably in the same ballpark by now. A couple 
of years. If nothing is done, a couple of years. 

Mr. Lantos. I want to thank you again for enormously important 
and significant material that you have presented. 

This hearing is adjourned. 

[Whereupon, at 4:44 p.m., the subcommittee was adjourned.] 



APPENDIX 



Testimony By 

Director of Central Intelligence 

R. James Woolsey 

To The 

House Foreign Affairs Committee 

Subcommittee on International Security, International 

Organizations, and Human Rights Subcommittee 

Rayburn House Office Building 

28 July, 1993; 10:00 a.m. 



Mr. Chairman, members of the committee, I welcome the 
opportunity to speak with you this morning about 
proliferation of weapons of mass destruction -- nuclear, 
biological, and chemical weapons, and the missiles to deliver 
them. Few issues have more serious and far-reaching 
implications for global and regional security and stability 
than the spread of these weapons. 

As you are aware, I testified on this subject in some 
detail to the Senate Governmental Affairs Committee in 
February of this year. Much of my statement from that 
hearing remains valid today and a full picture requires some 
repetition. There are a number of developments on which I 
can provide updates, however. 

Before I begin, I would like to emphasize that although 
I believe speaking openly on the critical issue of the 
proliferation of weapons of mass destruction is imporjiant and 
useful, I must balance that objective with my 
responsibilities to protect sources and methods. So on many 
issues details would have to be provided in classified form. 

I would like to begin by briefly outlining a few significant 
developments since my February testimony. 

First, Morth Korea, which I identified earlier this year 
as our most urgent national security threat in East Asia, 
continues to be of great concern. I cannot go into much 
additional detail because cf the ongoing discussions with the 
Nc r t h Kor ea.'^.s . 

North Korea's decision to suspend its withdrawal from 
ti-.e :Jonproli:eration Treaty ;n'FT) was certainly welcome, and 
we hope It portends a nore cooperative attitude and greater 
willingness to sub.T.it to its coir.T.itments under the NPT. This 
includes cccperatLng with the IAEA to maintain inspections. 

(77) 



78 



clearly we are not out of the woods, and progress depends on 
North Korea's following through with productive discussions 
with the IAEA. I must stress that our assessment that the 
North Koreans could have produced enough plutonium for at 
least one nuclear weapon still applies, and thus this issue 
continues to require our closest attention. 

When I testified last February, I described a new North 
Korean missile with a range of about 1,000 kilometers that 
was still in the developmental stage. I can now confirm that 
the North Koreans recently tested the missile, which in 
addition to conventional warheads, is capable of carrying 
nuclear, chemical, or biological payloads. Of greatest 
concern is North Korea's continued efforts to sell the 
missile abroad -- particularly to dangerous and potentially 
hostile countries such as Iran. 

Deployment of this missile will provide an important 
increase in the capabilities of various countries to attack 
their neighbors. With this missile North Korea could reach 
Japan; Iran could reach Israel; and Libya could reach US 
bases and allied capitals in the Mediterranean region. 

The situation in Iraq has also changed somewhat since I 
last spoke publicly. Upon his return from Iraq, Ambassador 
Rolf Ekeus , Chairman of the UN's Special Commission, 
announced that Iraq had agreed to the UN's demand to install 
cameras at a missile facility and, most importantly, to 
accede to long term monitoring under UN resolution 715. More 
details will become available in the coming weeks as UNSCOM 
formulates the UN response to Iraq's position and discusses 
the mechanics of long-term monitoring with the Iraqis. While 
Iraq's recent statements offer some promise, I am reminded 
that we have heard positive sounds from Iraq before, with 
little or no follow-through. It has been a long and 
frustrating two years, during which time Iraq has doggedly 
prevented the UN from implementing the Security Council's 
mandate. As with North Korea, we will have to measure Iraq's 
true intentions by its deeds rather than by its words. 

Meanwhile, the UN continues its work in Iraq, 
dismantling prohibited programs for weapons of mass 
destruction. Iraq's harassment of inspectors has not 
deterred the UN from continuing to- destroy a vast chemical 
munitions and agent stockpile, to dig out details about past 
activity, and to search for hidden missile, biological, and 
nuclear capabilities. 

Iraq's programs for weapons of mass destruction were 
heavily damaged by coalition attacks during Desert Storm. 
Nearly two years of intrusive UN inspections and the 



79 



imposition of strict international sanctions have set back 
their efforts as well. Iraq has struggled to maintain 
important elements of each program, hoping to outwait the UN 
and to rebuild its infrastructure for weapons of mass 
destruction once inspections and sanctions cease. We will 
continue to support strongly the multilateral effort to 
implement all relevant UN resolutions. Neither we nor the UN 
have lost sight of the basic fact that critical elements of 
Iraq's programs remain hidden. Therefore, intrusive 
inspections remain an important element of any monitoring 
regime. 

Another key area, and one that continues to be of great 
concern, is the dissolution of the Soviet Union and the 
resulting opportunities for proliferating countries to 
acquire sensitive technologies and material. This is a 
regular subject for media speculation. Sensational stories 
about sales of nuclear weapons., fissile material, and 
strategic missiles from the states of the Former Soviet Union 
are becoming commonplace. We continue to check out each one, 
but have not, to this point, detected the sale or transfer of 
significant nuclear material, nor the sale or transfer of the 
weapons themselves. 

We also continue to receive reports of brain drain from 
the former Soviet Union. Delays m pay, deteriorating 
working conditions, and uncertain futures are apparently 
spurring Russian specialists to seek emigration despite 
official restrictions on such travel. We also treat each of 
these reports seriously and attempt to determine the veracity 
of each. 

We continue to be concerned with a number of agreements 
under consideration by the Russian Government that involve 
transferring technology -- particularly several being 
negotiated with Iran for nuclear-related technology and 
reactors. Given Iran's ambitions to develop nuclear weapons, 
we must assume that any assistance to Tehran in the nuclear 
arena could assist their development of a nuclear weapons 
capability . 

Indeed, our concerns about Iran's intentions to dominate 
the region, its potential threat to US interests and allies 
in the Middle East, and its military build-up, have not 
diminished since I last spoke on this subject. Iran still 
poses a potential threat to its smaller neighbors and to the 
free flow of oil through the Gulf. It continues to support 
terrorism as an instrument of state policy. 

And Iran's ambitious effort to develop its military and 
defense sectors includes a serious, determined program to 



80 



develop all categories of weapons of mass destruccion . 
Unable to obtain what it wants from the West, Iran has 
increasingly looked to Asian sources for aid -- to North 
Korea for long range Scuds and now the 1,000 kilometer range 
missiles, and to China for a variety of other dangerous 
technologies. 

Iran's nuclear weapons program remains at a relatively 
rudimentary stage. We continue to believe that Iran probably 
will take at least eight to ten years to build its own 
nuclear weapons, and progress will depend on foreign 
assistance. Knowing Iran's hostile intentions, any requests 
for potentially sensitive technology or material must be 
viewed with great suspicion, even when it is claimed that 
such material is destined for legitimate civilian uses. 

Now I would like to briefly present a general overview 
of the proliferation problems we face. A growing number of 
countries are seeking advanced weapons, including nuclear, 
chemical, and biological weapons, as well as missiles to 
deliver them. As international awareness of the problem 
grows, these countries are becoming increasingly clever in 
devising networks of front companies and suppliers to 
frustrate export controls and to buy what would otherwise be 
prohibited to them. 

The challenge we face in controlling proliferation is 
complex and multifaceted. We must decipher an intricate web 
of suppliers, middlemen, and end users. We must distinguish 
between legitimate and illicit purposes, particularly for 
dual use technology. And we must help interdict the flow of 
material, technology, and know-how to potential proliferating 
countries . 

We do not expect any nations beyond Russia and China to 
bring together the requisite materials, technologies, 
facilities, or expertise to develop and produce ICBMs capable 
of striking the United States during this decade. Several 
nations with space launch capabilities could modify those 
launchers to acquire a long-range ballistic missile, but we 
do not expect any nation now having space launch vehicles -- 
India, Israel, and Japan -- to do so. 

After the turn of the century, however, some nations 
that are hostile to the US may be able to develop 
indigenously ballistic missiles that could threaten the US. 
We also remain concerned that hostile nations will try to 
purchase from other states ballistic missiles capable of 
striking the United States. A shortcut approach- -prohibited 
by the Missile Technology Control Regime and Nuclear 
Proliferation Treaty--would be to buy ICBM components 



81 



covertly, together with suitable nuclear warheads or fissile 
materials. The acquisition of key production technologies 
and technical expertise would speed up ICBM development. 

Meanwhile, the threat from theater ballistic missiles is 
current, real, and growing. For decades now, the 
international community has worked from the premise that the 
more countries that possess these weapons, the greater the 
likelihood they will be used. 

Just a brief overview of proliferation concerns around 
the globe underscores the threat posed to the US, to our 
interests abroad to our friends and allies. This overview 
will also underscore the importance of stemming this trend. 

More than 25 countries, many of them hostile to the US 
and our friends and allies, may now have or be developing 
nuclear, biological, and chemical weapons, and the means to 
deliver them. 

Aside from the five declared nuclear powers, several 
countries have, or are developing nuclear weapons 
capabilities. Iraq and Iran, for example, have the basic 
technology to eventually develop such weapons. 

More than two dozen countries have programs to do 
research on or develop chemical weapons, and a number have 
stockpiled such weapons, including Libya, Iran, and Iraq. 
The military competition in the always volatile Middle 
East has spurred others in the region to pursue chemical 
weapons. We have also noted a disturbing pattern of 
biological weapons development following closely on the 
heels of the development of chemical weapons. 

More than a dozen countries have operational ballistic 
missiles, and more have programs in place to develop them. 
North Korea has sold Syria and Iran extended range Scud 
Cs, and has apparently agreed to sell missiles to Libya. 
Egypt and Israel are developing and producing missiles, 
and several Persian Gulf states have purchased whole 
systems as well as production technology from China and 
North Korea. Some have equipped these missiles with 
weapons of mass destruction, and others are striving to do 
so . 

So far, I have addressed the dangers of nations 
acquiring or developing weapons of mass destruction, but we 
must also anticipate the possibility that hostile groups, 
specifically terrorist groups, might acquire these weapons 
with or without state sponsors. Certainly the bombing of the 
World Trade Center in New York last February has heightened 



82 



our sensitivity to the prospect that a terrorist incident 
could involve weapons of mass destruction. I would like to 
stress that we have no evidence that terrorists currently are 
developing or attempting to acquire such weapons. The 
extreme risk and complexity of handling these weapons suggest 
that they would not necessarily be the terrorist weapon of 
choice. 

Nuclear weapons would be especially difficult for a 
terrorist organization to develop, acquire, or use. 
Terrorists would need a considerable amount of sophistication 
to transport and activate these weapons. Chemical and 
biological weapons, on the other hand, have always proven to 
be more accessible because the materials are cheaper, more 
readily available, and have more dual-use functions. 
Consequently, the acquisition of components to produce 
chemical and biological weapons is more difficult to track 
and counter even though the export of certain key materials 
are restricted. 

While we have no evidence of any weapons of mass 
destruction in the hands of terrorists, we must remain alert 
to the possibility that such groups might acquire them. The 
enormous destructive power that could be wrought by a small, 
but hostile element beyond the reach of a central government 
compels our attention. 

Let me now briefly describe some of the causes of 
proliferation and outline some of the most dangerous 
proliferation threats. 

Nations continue to seek these weapons for a wide 
variety of reasons. Most nations perceive real benefits from 
the destructive ppwer these weapons represent to their 
national security. Others value them for the prestige that 
leaders believe they convey, while some seek them to dominate 
their neighbors. A few countries, such as Iraq, develop 
these weapons not just for symbolic reasons, but to actually 
use -- against their enemies in war or, tragically, on their 
own people. Others think that the only way to offset a 
hostile neighbor's threatening weapons is to develop similar 
capabilities. We can see this particularly in South Asia, 
where mutual Indian and Pakistani suspicions have fueled a 
nuclear arms race, increased the risk of conflict, and 
gravely increased the cost of war if it occurs. Still others 
view these weapons as a way to buy security on the cheap, a 
shortcut to achieving a military capability that they believe 
will serve as a compelling psychological deterrent. 

Russia's ability to maintain control of its special 
weapons and associated technologies has somewhat weakened 



83 



under the stresses and strains of the Soviet breakup. 
Today's faltering CIS economy and the attendant hardships 
among individuals with military and scientific expertise 
could lead to more disturbing military transfers and could 
also encourage illegal exports of technology or material. 
Tens of thousands of former Soviet scientists were involved 
in sensitive weapons programs; many may be tempted by more 
lucrative work abroad. The current emigration and customs 
bureaucracies cannot monitor more than the most critical 
personnel . 

Since I last testified, the news on export controls in 
Russia and other former Soviet states has been mixed. 
President Yel'tsin apparently is trying to tighten controls 
on strategic materials, but at the same time economic 
pressures are prompting other Russian officials to oppose 
implementing more rigid export regulations. These economic 
nationalist pressures are causing some Russian and Ukrainian 
officials to question the wisdom of adhering to the Missile 
Technology Control Regime (MTCR) . In a recent arms show in 
Moscow, the Russians advertised a derivative of the old SS-23 
for sale as a civilian rocket, raising additional MTCR 
concerns. Moreover, at an arms show in Abu Dhabi earlier 
this year, the Russians advertised an improved warhead for 
the Scud --an unwelcome development indeed, given the 
already widespread proliferation of this missile. 

Resolving the dispute over control of strategic forces 
in Ukraine remains critical to establishing a more stable 
security environment. We face a critical period as Russia 
attempts to maintain control over all of the some 27,000 
tactical and strategic nuclear warheads within the former 
Soviet Union, in the face of political difficulties, violence 
on its borders, and the possibility of disruptions within 
Russia itself. Although to date we believe that all of the 
tactical warheads have been returned to Russia, nearly 3,000 
strategic warheads remain outside Russia. 

The Russians continue to maintain strong centralized 
control of their nuclear forces, and we think that under 
current circumstances there is little prospect of a failure 
of control. But we are concerned about the future. Leaders 
in Russia and the other three states where the warheads are 
located have pledged to destroy much of the former Soviet 
stockpile, but it will take more than 10 years to do so 
unless the process can be speeded up. 

The former Soviet Union is by no means the only source 
for countries seeking sensitive technology and materials for 
weapons of mass destruction. For every shipment we stop from 
other countries, new suppliers seem to appear, willing to 



84 



manufacture, broker, sell, and cransporc material to any and 
all clients, no matter how dangerous or unsavory. And while 
we have witnessed progress on controlling the supply side of 
the equation, we detect little reduction m the demand for 
weapons of mass destruction. As long as nations perceive 
these weapons as enhancing their security, and others are 
willing to sell, we will all have our work cut out for us. 
Nations that seek these weapons, such as Iran, Iraq, and 
North Korea, aren't going to give up because we reorganize or 
because we claim that we are more effective. 

Mr. Chairman, several other problem areas are also of 
concern and worth mentioning. Libya continues to try to 
import technologies for its missile programs, and certainly 
no one has forgotten Colonel Qhaddafi's public statement 
about his quest for a nuclear bomb. 

Even as it publicly proclaims its good intentions, Libya 
is constructing a second chemical weapons production 
facility. The new facility recently described in the media 
is yet another indicator of the extent to which Libya-- 
apparently unchastened--will go to evade international 
attempts to prevent its development of chemical weapons. 

Fortunately, the UN sanctions imposed in the aftermath of the 
Pan Am 103 incident are assisting nonprolif eration efforts. 
Earlier this year, the UN sanctions committee blocked a 
shipment of chemical reactors destined for Libya, recognizing 
officially for the first time that Libya has an offensive 
chemical weapons program. The UN found that the dual-use 
equipment was destined for a military program and thus was 
prohibited under UN sanctions. Libya also continues its 
efforts to develop a ballistic missile capability, and to 
this end is scouring the West for technology and assistance. 
Only strict scrutiny and constant attention has prevented 
them from acquiring what they need. 

The arms race between India and Pakistan poses perhaps 
the most probable prospect for future use of weapons of mass 
destruction, including nuclear weapons. Both nations have 
nuclear weapons development programs and could, on short 
notice, assemble nuclear weapons. Neither India nor Pakistan 
seems to scrimp on resources for their expensive military 
programs, despite their economic conditions and widespread 
poverty among their citizens. India's program, older and 
probably larger than Pakistan's, culminated in 1974 with a 
nuclear detonation, and we are convinced has progressed from 
there. 

A nuclear exchange on the subcontinent would be 
devastating. Millions of innocent civilians in this densely 



85 



populated region would be vulnerable, particularly as each 
side strives to develop missiles which can reach deeper into 
the other's territory, putting at risk major population 
centers, including Islamabad and New Delhi. 

China is also a major proliferation concern, as an 
alternative supplier when western export controls make 
technology and weapons more difficult to acquire. China 
acceded to the Nuclear Nonproliferation Treaty and agreed to 
abide by the Missile Technology Control Regime last year. 
More recently, it signed the Chemical Weapons Convention. 
These are all positive developments, but we remain watchful 
for signs that China is not living up to its commitments. 
The breadth of Chinese contacts with potential prolif erators 
makes detecting and confirming potentially dangerous 
transactions difficult. 

As Iran's principal nuclear supplier, China has supplied 
research reactors and other technology. While China's 
dealings with Iran have been consistent with the NPT, it is 
of concern nonetheless given Iran's pursuit of a weapons 
capability . 

On the other hand, China's relationship with Pakistan is 
of greater concern. I am sure you have noted the press over 
the past six months covering China's reported sales of 
missiles to Pakistan. We are concerned about reports that 
indicate China has transferred M-11 related missile equipment 
to Pakistan, and we are monitoring this issue carefully. We 
are also concerned about Beijing's missile and chemical 
transfers to the Middle East. 

I wish I could come to you, less than half-a-year after 
my last testimony on this subject, with better news and 
report that we have witnessed great strides toward solving 
the problem of proliferation. But once again I have painted 
a rather bleak picture because I am afraid accuracy and 
candor require bleakness. The spread of nuclear weapons 
capabilities is of utmost concern because of the horrible 
destructive capacity. It will put millions of innocent 
civilians at risk and dramatically change regional security 
landscapes wherever these weapons are introduced. 

A North Korean nuclear weapon would threaten our allies 
in all of Asia as well as US forces in the region. Iraq's 
indiscriminate use of chemical weapons in its war with Iran 
underscored the urgency in our efforts to stop the spread of 
and ultimately banish this whole class of weapons. And 
lastly, countries persist in pursuing biological weapons 
development, one of the most troubling capabilities of all, 
despite a strong international consensus to the contrary. 



86 



The Intelligence Cominunity recognizes the urgency of 
Chis problem and is responding co the increasing threat and 
to the ever-increasing demands of our consumers for 
information on this vital issue. Indeed, by drawing 
attention to this issue, we are seeing a growing awareness in 
the international community about the dangers of 
proliferation and an increasing willingness to cooperate 
multilaterally to stem the spread. As a result, we are all 
making it more difficult for proliferating nations to develop 
dangerous weapons programs. 

A nonproliferation initiative last year set forth 
principles to guide our nonproliferation efforts. The 
Intelligence Community was instructed to accelerate its work 
in support of US efforts to stem the spread of weapons of 
mass destruction, and to broaden our support to international 
organizations and increase the pool of experienced, well- 
trained experts committed to the nonproliferation agenda. 
The Nonproliferation Center, formed about one year ago, is 
focusing our efforts in this crucial area and improving our 
support to the policy, operations, licensing, and enforcement 
agencies. And we are making progress. But this a complex 
issue which cannot be cackled easily or quickly. It requires 
a long-term commitment, patience, and perseverance. 

The value of intelligence is no longer measured only by 
how much it adds to our knowledge of a particular subject. 
It is also measured by how we have directly contributed to US 
and multilateral actions to stop proliferation. 

A number of the questions in which the committee has 
expressed interest address the Intelligence Community's 
ability to contribute directly to countering proliferation 
and developing actionable intelligence to enable us to track 
and, ultimately, to interdict the flow of dual-use 
technology. We have put a heavy emphasis on collecting this 
type of information, and are making every effort not only to 
improve access to it within our government, but also to 
increase sharing among allies who, given the right 
information, can contribute to our common goal. Already, the 
US is discovering a willingness among nations to take 
decisive action against prolif erators . 

I know you are interested in U.S. support for 
international organizations. The UN's actions in North Korea 
and in Iraq illustrates how multinational support to 
international organizations has broadened the mission of the 
Intelligence Community. We have seen some remarkable changes 
in the world in just the past few years, with the UN taking a 
much more active role on the international scene. This 



87 



should grow in the future due to new international agreements 
such as the Chemical Weapons Convention and to strengthened 
existing agreements such as the Nuclear Nonprolif eration 
Treaty, the Biological Weapons Convention, and the Missile 
Technology Control Regime. 

These agreements are attracting more attention and wider 
membership, and we are seeing stricter enforcement. These 
agreements will require the full support of all member 
states, not just the US, to monitor compliance and ensure 
enhanced global security. We intend to cooperate 
aggressively and productively. The US, among many other 
nations, remains committed to providing the UN the 
information and support it needs to complete its mission in 
Iraq and elsewhere. 

Working closely with the State Department, we have 
shared an unprecedented amount of information with the UN, 
assisting them in completing their new missions. 

Clearly, strengthening the IAEA must go hand-in-hand 
with renewing and reinforcing the NPT. We've already 
witnessed a new willingness by the agency to pursue 
safeguards inspections more aggressively. 

Mr. Chairman, I'd like to close on a note of optimism, 
tempered with caution. During the past two years, three ■ 
nations--France, South Africa, and China--became new 
signatories of the NPT. Membership in other multilateral 
institutions such as the Australia Group and the Missile 
Technology Control Regime is expanding. Argentina is 
interested in joining the MTCR and is dismantling its Condor 
missile program. Germany, once a high technology supermarket 
for a range of troubling exports and countries, has enacted 
strict export controls. 

We've made some important headway in making the 
proliferation of weapons of mass destruction a more 
difficult, expensive, and lengthy proposition. Obtaining 
these troubling capabilities today is a much more difficult 
task than it was a few years ago. 

I believe the Intelligence Community has made 
significant progress on this difficult task. Through our 
approach and our continued cooperation with other agencies 
involved in policy, enforcement, licensing, and operations, 
we are setting the stage that will allow us to make further 
progress in countering proliferation activities worldwide. 



88 
Monterey Institute of Inl^raational Studies 




PREPARED STATEMENT OF WILLIAM POTTER 

BEFORE THE SUBCOMMITTEE ON INTERNATIONAL SECURITY, 

INTERNATIONAL ORGANIZATIONS AND HUMAN RIGHTS 

OF THE COMMITTEE ON FOREIGN AFFAIRS 

September 14, 1993 



I am very pleased to have the opportimity to testify before the Subcommittee on 
International Security, International Organizations, and Human Rights. The Subcommittee 
has asked me to address the proliferation risks posed by nuclear exports from the Soviet 
successor states. I also was asked to identify specific policy tools at the disposal of the 
U.S. government that might be used to encourage nuclear export restraint on the part of 
the newly independent states (NIS). 

THE SOVIET LEGACY 

Soviet nuclear nonproliferation policy was noteworthy for the unusual degree to 
which it was in concert with that of the United States. This cooperation persisted during 
even the most troubled periods of superpower's relations in the 1970s and 1980s and was 
reflected in regular bilateral consultations and in a variety of multilateral fora including 
the International Atomic Energy Agency, the London Suppliers Group, the Nuclear 
Exporters (or so-called Zangger) Committee, and the NPT Review Conferences. 

Notwithstanding this cooperation and overall commendable record on 
nonproliferation since it cut off nuclear assistance to China in 1958, the Soviet Union in 
the late 1980s and early 1990s undertook a number of nuclear export initiatives that 
signalled a less prudent approach to nonproliferation. These initiatives included efforts 
to market nuclear goods and services to non-NPT parties (e.g., Argentina, India, Israel, 
and Pakistan) without requiring the application of "full-scope" safeguards as a condition 
of export. During the same period, the Soviet Union also adopted a more lax nuclear 
export policy toward NPT states and expressed a readiness, for example, to sell South 
Korea sensitive nuclear technology including uranium enrichment and fast breeder reactor 
processes. Although none of these export initiatives were prohibited by the NPT, they 
implied that even long-time supporters of nonproliferation were, for the right price, 
prepared to sell nuclear equipment, technology, and services to potential proliferators. 



89 



These nuclear initiatives coincided with the decline of the Soviet Ministry of 
Foreign Affairs' influence on nuclear export decisions, and the corresponding rise in 
power of the Ministry of Atomic Power and Industry (MAPI). MAPI's export policy 
appeared to be driven primarily by hard currency considerations, with little regard for the 
foreign or defense policy implications of exports of sensitive technology. MAPI's ability 
to pursue an export policy which emphasized profit considerations was facilitated by the 
absence in the Soviet Union of any domestic legislation governing nuclear exports. It 
also benefited from the absence of public scrutiny due to the lack of Soviet journalists or 
independent experts knowledgeable about nonproliferation issues. 

NATURE OF THE PROBLEM TODAY 

The Danger of Unregulated Exports 

The basic economic and domestic political conditions which encouraged a 
reorientation in Soviet nuclear export policy under Gorbachev remain today, but in a more 
acute form. Nuclear goods and services, along with other defense-related products, are 
among the few commodities from the former Soviet Union that are in demand abroad and 
are able to generate hard currency. They also are increasingly available to private and 
quasi-private nuclear entrepreneurs who have found a foothold in the nuclear export 
industry previously monopolized by the state-run firm Techsnabexport. 

Most of the more sensational accounts of black market activity involving nuclear 
materials of NIS origin have not been substantiated. There is no hard evidence, for 
example, that nuclear weapons, nuclear weapon components, or significant quantities of 
weapons-grade fissile material has been smuggled out of the Soviet successor states. 
Unfortunately, conditions in the former Soviet Union are such that many of the reports 
are plausible even if not true. One therefore must be very careful not to discount the 
potential for proliferation-significant black market exports from the Soviet successor states 
based on what has been discovered to date. There also are indications that governmental 
organs in some of the newly independent states may tolerate, if not officially sanction, the 
export of sensitive nuclear commodities with little regard for their proliferation 
implications. 

What is perhaps most surprising, given the economic chaos in the former Soviet 
Union is the absence of more substantial cases of nuclear smuggling. To be sure, nuclear- 
related items have found their way out of the Soviet successor states. Germany alone is 
alleged to have carried out over 100 arrests associated with efforts to smuggle nuclear 
material originating in the republics of the former Soviet Union. The government of 
Belarus also has acknowledged a number of illicit nuclear transactions involving its 
territory, including the interdiction of Russian uranium destined for Poland. According 
to Russian nuclear regulatory officials, even the Ministry of Atomic Energy (MINATOM) 
recently has confirmed that some quantity of fissile material has been stolen from 
MINATOM stockpiles. 



90 



While one cannot discount the possibility of undetected and militarily significant 
nuclear trade, the overwhelming majority of arrests and confirmed cases of smuggling 
attempts to date have involved small quantities of low-enriched uranium from civilian 
reactor fuel assemblies, non-weapons-related radioactive elements such as cesium, cobalt, 
and strontium, and bogus goods falsely promoted as nuclear. No uranium that has been 
seized, for example, has been enriched beyond 3 percent and most of the minuscule 
amounts of plutonium that has been confiscated has been in the form of flakes from 
smoke detectors. 

Dual -Use Exports 

The area in which nuclear-related trade from the former Soviet Union has 
flourished, with scarcely a peep from Western governments, is in dual-use materials. The 
two principal transgressors appear to be Ukraine and Estonia. 

The Ukrainian case is the less surprising of the two, given Ukraine's extensive and 
diverse nuclear-related capabilities, its desperate search for hard currency earnings, and 
its ambiguous stance toward nuclear non-proliferation. The center for producing nuclear- 
related dual-use items in Ukraine is at Dneprodzerzhinsk ~ until recently a closed 
military-industrial production complex. Dneprodzerzhinsk hosts a number of facilities for 
the production of heavy water, zirconium, and hafnium. It also is the single production 
site in the former Soviet Union for ion exchange resins used in the so-called "Asahi" 
chemical exchange process of uranium enrichment. 

According to a U.S. firm which became part owner of one chemical plant at 
Dneprodzerzhinsk, its Ukrainian partner has already shipped 45 tons of hafnium and 
zirconium (two of 65 items on the Nuclear Suppliers Group (NSG) restricted list) to 
Belgium and the Netherlands where they sat for months at docks in Antwerp and 
Rotterdam awaiting export to unknown third parties. An additional shipment of 1 1 tons 
of hafnium from the same complex was detained in the fall of 1992 by Hungarian 
authorities who were suspicious about it end-use. All of these Ukrainian-produced 
commodities would be subject to stringent export control, if Ukraine were a party to the 
April 1992 NSG accord on dual-use exports. Unfortunately, it is not; nor has it been 
invited to join the NSG. 

A less well-known and more surprising major exporter of dual-use items from the 
former Soviet Union is Estonia ~ a 1992 signatory of the nuclear Non-Proliferation Treaty 
(NPT) but not a party to the 1992 NSG accord. Although lacking an indigenous 
production capability, Estonia recently has emerged as one of the world's leading 
exporters of rare metals, some of which have nuclear weapons applications. In one 
bizarre case last year, four tons of Russian zirconium was supposed to be routed to 
Estonia by an American-owned firm, ostensibly for purposes of jewelry production. 
When contacted by suspicious Russian export control officials, the Talinn government 
could not guarantee that Estonia was the end-user of the material,, which was of a grade 



91 



and quantity incompatible with jewelry manufacturing purposes. This particular license 
application was denied, but Russian officials believe large quantities of dual-use metals 
exported from Estonia ultimately find their way to states coveting nuclear weapons. U.S. 
Government officials acknowledge that large Estonian shipments of zirconium were also 
seized by Finnish customs officers. However, they do not indicate the intended end-user 
or what action, if any, was taken to try to alter Estonian export behavior. 

It is possible that in the present environment of decentralized authority, porous 
borders, and underdeveloped export control structures, that trade in dual-use nuclear goods 
was undertaken by private nuclear entrepreneurs without the knowledge or sanction of the 
host governments. The volume of trade, the failure to establish meaningful export 
controls, and the delay in placing nuclear facilities under international safeguards, 
however, provide circumstantial evidence that some of the Soviet successor states are 
prepared to tolerate export behavior that threatens the nonproliferation regime. 

The Nuclear Export Potential of the Non-Russian Republics 

As of mid- 1993, none of the nuclear facilities in the former Soviet Union was 
under international safeguards. The bulk of these sites are well-known and are 
concentrated in Russia, which is not obliged to place any of its facilities under safeguards 
by virtue of its status as a nuclear-weapon state party to the NPT. Less well-known is 
the presence of nuclear fuel cycle facilities and nuclear material stockpiles in the non- 
Russian republics. Although these nuclear assets are not likely to be adequate to support 
an indigenous nuclear weapons program (with the possible exception of Kazakhstan), they 
do pose significant proliferation risks from the standpoint of nuclear exports. 

All of the former Soviet Union's nuclear warheads outside of Russia are located 
in Ukraine, Kazakhstan and Belarus (see Table I). Despite promises by these three states 
to accede rapidly to the NPT, as of September !, 1993, only Armenia, Azerbaijan, 
Belarus, Estonia, Latvia Lithuania and Uzbekistan had acceded to the treaty. None of 
these recent adherents to the NPT, nor any of the other Soviet successor states, aside from 
Russia, is a member of the Nuclear Suppliers Group or subscribe to NSG guidelines 
regulating the export of 65 dual-use nuclear items. 

The most controversial and potentially significant fuel cycle facility outside of 
Russia is at Navoi in Uzbekistan. Information drawn from interviews over the past two 
years by the author and his associates with Russian and Uzbek nuclear scientists points 
to the possible existence of a uranium enrichment facility there, although its 
characteristics and present status are in doubt. According to one Russian scientist, in the 
early to mid 1970s and possible later, both conversion of uranium oxide to uranium 
hexafluoride and uranium enrichment were conducted at Navoi. The same source 
indicates that this information is consistent with the results of a recent analysis by local 
scientists of uranium ore tailings from the Navoi region. Their analysis, part of a study 
on the feasibility of recovering gold from the tailings, indicated the presence of an 



92 



unnaturally low concentration of uranium-235 (U-235), which could only have resulted 
from enrichment at some point in the past. Russian officials, however, continue to deny 
the existence of any operational U-235 enrichment facilities in the former Soviet republics 
outside of Russia. 

Fuel cycle facilities are not the only places where one can find unsafeguarded 
nuclear material. The non-Russian states also have nuclear research and training centers 
in Yerevan (Armenia), Riga (Latvia), Minsk (Belarus), Kiev and Sevastapol (Ukraine), 
Almaty and Semipalatinsk (Kazakhstan), Tbilisi and Sukhumi (Georgia), and Tashkent 
(Uzbekistan). Many of these centers are co-located with research reactors. The ones at 
Riga and Tashkent are fueled with approximately four kilograms of uranium enriched to 
90 percent U-235, while those in Kiev, Sevastapol and Almaty use uranium enriched to 
36 percent U-235. There are about five kilograms of enriched uranium in the Kazakh 
reactor in Almaty and 1.36 kilograms in each of the two Ukrainian reactors. The three 
research reactors at Semipalatinsk have a total U-235 inventory of approximately 24 
kilograms, at least 9 kilograms of which is probably enriched to over 90 percent. The 
research reactors in Minsk and Tbilisi also used highly enriched uranium before they were 
shut down in 1988 and 1990, respectively. It is not clear what was done with their fuel, 
although it was probably returned to Russia. 

There are also 14 nuclear power reactors in commercial operation in Ukraine, two 
in Lithuania and one in Kazakhstan. Those of the graphite-moderated Chernobyl (RBMK) 
variety in Lithuania and Ukraine are a high power version of the plutonium production 
reactors used for military purposes. 

A greater nuclear export and non-proliferation risk is posed by the unsafeguarded 
liquid metal fast breeder reactor (the BN-350) at Aktau (formerly Shevchenko) in 
Kazakhstan. This reactor used for both desalination and electricity generation purposes, 
is capable of producing over 100 kilograms of weapons-grade plutonium a year. It is the 
same kind of reactor which Israel expressed an interest in buying from the Soviet Union 
in 1991. It is not known how much plutonium has been produced by the Kazakhstan! 
reactor since it began commercial operation in 1973, or how much unsafeguarded 
plutonium remains at the reactor site. Although the reactor appears to have been fueled 
primarily with uranium enriched to 20 to 25 percent U-235, it was designed also to use 
mixed-oxide (MOX) fuel. Beginning in 1990, according to Russian physicist Oleg 
Bukharin, approximately 100 fuel elements of MOX fuel were loaded into the reactor as 
part of a research and development program. The fuel assemblies reportedly were made 
in Russia from weapons material at the Mayak industrial complex near Chelyabinsk. 

Two additional sites in Kazakhstan and Ukraine are of particular importance from 
the standpoint of unsafeguarded nuclear exports. They are the Ulbinsky Metallurgy Plant 
in Ust-Kamenogorsk, Kazakhstan, and the previously noted industrial complex at 
Dneprodzerzhinsk, Ukraine. 



93 



The Ulbinsky Metallurgy Plant is the largest producer in the former Soviet Union 
of beryllium used in civilian nuclear power reactors and also in the manufacture of 
nuclear weapons. The plant also produces nearly all of the fuel pellets used in Soviet 
manufactured reactors. These pellets contain uranium already enriched to a low level at 
gas centrifuge plants in Russia. As such, they may be attractive to countries with nuclear 
weapons ambitions such as Iraq and Iran because the initial, most energy-consuming part 
of enrichment would have been completed; the fuel pellets could also be used, once 
crushed, to obtain uranium tetrachloride for use in a calutron enrichment process. 

The Dneprodzerzhinsk industrial complex also is the site of a uranium oxide 
production facility, in addition to functioning as a major production site for dual-use 
nuclear commodities. Although the plant is currently idle, it is reported to have a 
stockpile of 800 tons of unsafeguarded uranium oxide on its premises. 



Underdeveloped Export Controls 

Implementation of an effective nonproliferation strategy in the former Soviet Union 
is hindered by the low priority most policymakers there attach to the issue of export 
controls. In most cases this is not because national policymakers are opposed to the 
principles of export control and nonproliferation. Instead, it is the product of only faint 
recognition of the issues' relevance to their immediate situation in which they struggle to 
survive from one crisis to the next. 

Unfortunately, even for those successor states where there may be some 
recognition of the importance of export controls — e.g., in Belarus ~ budget deficits and 
a shortage of trained personnel remain serious obstacles to meaningful corrective action. 
Only in Russia, which inherited most of the Soviet Union's nuclear export control 
structure, can one speak of a professional cadre of nonproliferation experts, well-versed 
in such matters as export control licensing, material accounting, physical protection, and 
international safeguards. 

Even in Russia, which in 1992 adopted significant new export control measures, 
problems persist because of a combination of bureaucratic, legal and economic factors. 
A potential for conflict of interest and export control, abuse, for example, arises from the 
tendency for the head of the Export Control Commission to also direct the Commission 
for Military and Technology Cooperation, a formerly secret body whose mandate is to 
promote the export of defense items. The situation nearly became much worse in early 
Summer 1992, when the head of the two commissions, Georgi Khizha, sought to merge 
them into a single body. This action only was forestalled by a decision by President 
Boris Yeltsin after forceful intervention by the Ministry of Foreign Affairs. Although the 
recent dismissal of Khizha from his dual posts offered the opportiinity to separate clearly 
the functions of promoting exports and export control, Oleg Soskovets has since assumed 
the head of both commissions. 



94 



The danger of new efforts to emasculate the Export Control Commission is 
heightened by the fact that the entire Russian export control structure continues to derive 
its legal basis from executive branch decrees rather than parliamentary legislation. In 
addition, poor pay, alternative employment opportunities in the private sector, and the 
perception of a reduced impact on policy outcomes are leading to a "brain drain" from 
the Ministry of Economics and the Ministry of Foreign Affairs. Such an exodus will 
clearly impede the development and implementation of sound nuclear export and 
nonproliferation policy. 

The economic and political constraints under which the Russian export control 
system functions are evident in the decisions, apparently sanctioned by the new Export 
Control Commission, to sell Iran two nuclear power reactors and to provide China with 
nuclear assistance, including reactors and possibly a uranium enrichment plant. Russia 
previously had concluded a similar deal with India (which collapsed when Russia was 
unable to provide the credit promised by its predecessor) and is reported to have pursued 
reactor sales with Pakistan and Algeria. Although these sales do not violate Russia's NPT 
status or other formal nonproliferation obligations, they are at odds with prudent nuclear 
export policy. They also have the effect of encouraging other Soviet successor states to 
subordinate nonproliferation objectives to those of economic gain. 

Notwithstanding certain shortcomings, Russia generally has taken positive steps 
to regulate nuclear exports. However, these actions are undermined by the absence of 
parallel export control bodies and procedures in the non-Russian states. As a 
consequence, one confronts the problem of "the weakest leak." That is, even if controls 
are in rather good shape in Russia, the absence of controls on trade and transit between 
Russia and the other successor states means that heavy water, beryllium, uranium oxide, 
and other controlled commodities can pass to the CIS point of least resistance and from 
there to countries of proliferation concern. This problem is likely to be compounded if 
a proposed "common customs zone" for CIS members is actually implemented. 

A very important measure designed to correct this situation of underdeveloped 
controls was the agreement on export control coordination signed in Minsk on June 26, 
1 992, by eight of the Soviet successor states (Armenia, Belarus, Kazakhstan, Kyrgyzstan, 
Russia, Tajikistan, Turkmenistan and Uzbekistan; Tajikistan signed with reservations). 
The agreement specifies, among other things, that parties "will create national export 
control systems at their earliest convenience," and "will coordinate their export control 
policies." It remains problematic, however, whether the measures called for by the Minsk 
accord will actually be implemented. This was evident at the follow-on meeting to the 
accord held in 1992 and 1993. None of the non-Russian parties to the accord were able 
to report much headway in implementing the agreement. Belarus, however, is now poised 
to receive major U.S. export control assistance and Ukraine has made some important 
strides by creatmg a new control structure no longer hostage to the Ministry of 
Conversion and the remnants of the old Soviet military-industrial complex. 



95 



The Danger of Nuclear Mercenaries 

Literally tens, if not hundreds, of thousands of scientists and technicians with 
experience in the design and manufacture of nuclear weapons and related technology have 
been produced by the Soviet military program. Reportedly, 100,000 scientists, engineers, 
and officials have nuclear security clearances equivalent to the Department of Energy Q 
Clearance in the United States. Three to five thousand of these individuals are directly 
involved in plutonium production and uranium enrichment activities and another two 
thousand may have detailed knowledge of nuclear weapons design. Today they are 
scattered throughout the republics which formerly constituted the USSR. 

When I testified before a Senate subcommittee last year on a related topic, I 
emphasized that there is no evidence that most of these individuals are anything but loyal 
citizens who are reluctant to leave their homeland. I continue to believe that is true. 
Their dedication, however, is increasingly tested in an environment of job insecurity, food 
and housing shortages, plummeting prestige, and political turmoil. There also are 
indications, manifest in new union activity at the nuclear weapons laboratories and in 
private communications with Western scientists, that a growing number of Russian nuclear 
scientists distrust their lab and MINATOM bosses and believe that any Western assistance 
they receive will be used to line their own pocketbooks rather than to improve the average 
scientist's lot. 

Worker dissatisfaction in the nuclear complex is also apparent in greatly increased 
job turnover figures, rising more than ten-fold since 1990 to a level of at least 20-30 
percent. This substantial migration of the nuclear work force, much of it to the private 
sector, has the effect of complicating efforts to monitor nuclear scientists and raises 
doubts about lab spokesmen claims that no employees have sold their services abroad. 

Indeed, nuclear industry officials in Moscow acknowledge that Russian nuclear 
scientists have received foreign offers for their services. There also are numerous Russian 
and Western media reports, difficult to substantiate, which suggest that Algeria, China, 
India, Iran, Iraq, Libya, and Pakistan are actively pursuing nuclear scientists from the 
former Soviet Union with some limited success. In addition, there is evidence that as 
many as 40 nuclear specialists from the former Soviet republics may have emigrated to 
Israel since 1989. 

The potential proliferation implications of the malaise within the former Soviet 
nuclear weapons complex were recognized at an early date by Western governments. 
Their response was to support the creation of International Science and Technology 
Centers in Russia and Ukraine to engage in civilian research those scientists previously 
employed by the Soviet nuclear weapons program. 

The concept was a sound one, but has yet to be realized in practice due to 
bureaucratic delays, a lack of enthusiasm for the project on the part of key actors in the 



96 



host government, and the multinational makeup of the center's boards. Although the 
Moscow center is now physically in place, it is unlikely that any grants will soon be made 
to under-employed Russian scientists. The proposed center in Kiev is even less advanced 
and its ultimate fate is apt to be determined by the outcome of the internal Ukrainian 
nuclear policy debate. 

A ppropriate U.S. Policy Responses 

While there is little evidence that militarily significant nuclear exports from the 
newly independent states have taken place, conditions there are ripe for export control 
abuse. Massive stocks of weapons-grade materials, underemployed nuclear experts, 
unsafeguarded nuclear facilities, desperate demands for hard currency, and general 
governmental disinterest in, if not disregard for, the control of nuclear-related products 
require immediate corrective action. 

A number of useful recommendations have been made over the past year, although 
their implementation has been less than successful. The proposals include means to 
expedite Soviet successor state accession to the NPT; to enhance the monitoring of 
nuclear exports (including greater U.S. -Russian cooperation and intelligence sharing); to 
develop nuclear export and non-proliferation expertise in the non-Russian states; to 
accelerate fmancial aid and technical assistance in the area of export controls and the 
retooling of weapons scientists; and to tighten the porous borders between Russia and its 
neighbors in the former Soviet republics. The international community must persist in 
pursuing these initiatives, but additional action is required. 

Restore U.S. Credibiiitv 

U.S. leverage in nuclear negotiations with the Soviet successor states has been 
undercut by repeated, unfulfilled promises. To regain some measure of credibility, 
Washington must expeditiously use funds already allocated by Congress to reward nuclear 
export and non-proliferation restraint. As of September 9, 1993, only 52 million (i.e., 
less than seven percent) of the $800 million authorized by the "Nunn-Lugar" legislation 
had actually been expended. 

It is imperative now to stop interagency squabbles and to make money available 
immediately to Belarus to reward its nonproliferation restraint. Money could profitably 
be used, for example, to establish a model export control training center in Minsk. The 
center could accommodate trainees from throughout the former Soviet Union and might 
serve the additional nonproliferation purpose of stemming the potential brain drain by 
restraining scientists from the nuclear weapons establishment in the related field of 
nuclear export controls and safeguards procedures. Similar centers might be established 
at modest cost in Kazakhstan and Ukraine to improve nuclear safety operations, to study 
alternative energy resources, and to devise methods for the cleanup of the environmental 
consequences of nuclear weapons production and testing. 



97 



Means also must be found now to provide Ukraine with assistance in the area of 
export controls and nuclear safety US policy which links provision of this assistance 
to conclusion of the so-called "umbrella agreement" no longer makes sense and, indeed, 
undermines the positions of the few organizational actors in Ukraine which support 
nonproliferation restraint. Timely provision of matenal assistance to organizations such 
as the Expert-Technical Committee and the State Committee for Nuclear and Radiation 
Safety, on the other hand, may enhance their bureaucratic influence, while lessening the 
risk of nuclear reactor mishaps and export leakage. 

Look Beyond Ukraine 

The focus of efforts to shore up the difficult situation in Ukraine should not lead 
us to Ignore the nuclear export and nonproliferation problems in Kazakhstan, Russia, and 
the other successor states Significant anti-NPT sentiment and an inclination to export 
anything to anyone for the nght price is present, if less visible, in Kazakhstan. Moreover, 
support for the NPT could wane in Russia if Ukraine disavows its NPT pledge. 

The presence on the territories of Kazakhstan, Kyrgyzstan, Tajikistan and 
Uzbekistan of a variety of nuclear matenals, equipment, technology and technical 
expertise is not reason for great anxiety over indigenous nuclear weapons programs in 
Central Asia. However, there are growing economic incentives there to sell sensitive 
products abroad. It, therefore, would be desirable for the United States to apply a portion 
of the funds earmarked for denuclearization and export control assistance to successor 
states other than the "big four." 

Expand Nuclear Suppliers Group 

Estonia, Kazakhstan, Ukraine and other Soviet successor states with nuclear export 
capabilities should be encouraged to join the Nuclear Suppliers Group (NSG). At a 
minimum, they should be invited to participate as observers at NSG meetings. The 
engagement of these states in the international export control process is important not only 
as a means to share technical information and secure policy commitments, but as a 
vehicle to create internal institutional mechanisms within the governments with 
responsibility for nuclear export controls. 

Set Proper NPT Example 

US efforts to encourage nuclear export restraint in the states of the former Soviet 
Union are undermined by the perception that Washington does not practice what it 
preaches The litmus test for the Clinton administration's commitment to nonproliferation 
will be Its own self-restraint in dual-use exports, the consistency with which it applies 
non-proliferation standards, and, from the viewpoint of officials in Moscow, Kiev and 
many other foreign capitals, the extent to which it is prepared to forego nuclear testing 
and reduce its own nuclear arsenals. 

To date, the international community has been fortunate to avoid a flood of illicit 
nuclear exports from the former Soviet Union But this luck is unlikely to continue 
indefinitely Unless steps are taken promptly to enhance the capability of the newly 
independent states to control nuclear exports and to alter the balance of incentives and 
disincentives to export sensitive nuclear goods and services, the next sensationalist 
headline about black market nuclear activity may well turn out to be true. 



98 
Mojiterev Institute of InternatiunaJ Studies 



September 1993 
Biographical Sketch for Dr. William C. Potter 



Dr. William Potter is a Professor and Director of the Center for Russian and 
Eurasian Studies at the Monterey Institute of International Studies. He also directs the 
MIIS Program for Nonproliferation Studies. He is the author oi Nuclear Profiles of the 
Soviet Successor States (1993) and Nuclear Power and Nonproliferation: An 
Interdisciplinary Perspective ( 1 982), the editor of Verification and SALT: The Challenge 
of Strategic Deception (1980). Verification and Arms Control (1985), and International 
Nuclear Trade and Nonproliferation (1990). and the co-editor of Soviet Decisionmaking 
for National Security (1984), The Nuclear Suppliers and Nonproliferation (1985), 
Continuity and Change in Soviet-East European Relations (1989), and International 
Missile Bazaar: The New Suppliers' Network (1993). He also has contributed to 
numerous scholarly books and journals. He has served as a consultant to the Arms 
Control and Disarmament Agency, Lawrence Livermore National Laboratory, the RAND 
Corporation, and the Jet Propulsion Laboratory. His present research focuses on nuclear 
safety in the former Soviet Union, the emerging nuclear and missile suppliers, and nuclear 
proliferation in the Newly Independent States. He is a member of the Council on Foreign 
Relations and the International Institute of Strategic Studies, and serves on the Board of 
Directors of the BENS Nonproliferation Steering Group 



99 



PARTIAL TEXT OF REMARKS 

BY DR. STEPHEN D. BRYEN 
PREPARED FOR DELIVERY TO THE SUBCOMMITTEE ON INTERNATIONAL 
SECURlPi', INTERNATIONAL ORGANIZATIONS AND HUMAN RIGHTS 

SEPTEMBER 14, 1993. 



Today there is a new type of arms race. It is carried out, in part, by countries hostile 
to the United States and to U.S. interests abroad. These countries lacked a credible 
military threat other than terrorism against U.S. interests until now. Today, however, 
they are acquiring the technology to make weapons of mass destruction. The risk is 
increasing that those acquiring weapons of mass destruction might use them, or they 
might be used in conjunction with terrorist activity. 

The acquisition process used by countries trying to get weapons of mass destruction 
is aimed at buying technology from supplier countries and using it to develop 
nuclear, biological and chemical weapons and delivery systems such as ballistic 
missiles and low-flying cruise missiles or RPV's. 

In many ways the method of acquisition resembles that used by the KGB and GRU for 
the Soviet Union to acquire technology from the West. 

Many sources of the technology are Western companies. Whether they are allowed 
to sell the technology because export controls have been relaxed and licenses are not 
required; or their sales are given official export approval. 

Today no one seriously checks the end use on licenses that are routinely reviewed 
and approved. And for goods that do not require licenses, there is no basis for 
government intervention at all. 

From what I can determine, there is very little interest nowadays in blocking exports of 
sensitive goods and materials, even where the evidence points to significant risks. 
This lack of interest covers all the COCOM-member countries. 

Struggles over whether to "let something go" occasionally appear in the press. U.S. 
officials have been vexed over whether to sell cruise-missile engine technology to 
China (still being resisted); supercomputers to China (sale approved); Germany 
reportedly continues to sell advanced machine tools to Iran for their weapons 
programs (Switzerland and Italy are said to be doing the same); global positioning 
systems (many of them no longer controlled) are going to Iran and to other hot spots 
around the world and are being sold by many countries. 



100 



The lack of interest by licensing officials in carrying out a counter proliferation 
program suggests there is a major disconnect between what policy makers say and 
what they do. Nearly every American and European official endorses a counter 
proliferation program. On the other hand what we hear is mostly rhetoric. A serious 
counter proliferation policy would consist of the following elements: 

(1) a structured, coherent and coordinated international program to control the flow 
of the most relevant technology that can be used for WMD programs; 

(2) a defense program focused on ways to counter the threat of WMD weapons and 

their delivery systems; 

(3) a strongly focused political effort to isolate the most dangerous threats to the 
international community. 



A Coordinated International Program 

Leaving technology controls completely in the hands of each country, without 
requiring coordination of licenses, is a prescription for proliferation. 

One only need to look at what happens at the Commerce Department. 

During the Iraqi arms build up period the Commerce Department approved hundreds 
of licenses for sensitive technology for Iraq. This happened, in part, because 
Commerce had a free hand and did not have to answer to anybody. When the 
occasional official within the Department had qualms - as some did - their objections 
were overridden. 

The same happened in Britain where the Department of Trade and Industry made 
decisions on exports even where there was clear knowledge in their hands of 
significant risks -including nuclear weapons applications for the technology under 
consideration. Key documents about British decisions on exports have become 
known because the Matrix Churchill court case declassified them. 

Neither the British nor American officials were concerned about the international 
ramifications of their exports policy. Other countries, Germany, Italy, Belgium and 
France were equally unconcerned, except to the extent that they wished to gain as 
much market share as possible. 

Had there been a requirement that all licenses approved by each government still had 



101 



to stand up to international review, more care would have been given about 
approving some exports in the first place. In addition, internally the governments 
would have to take more seriously objections raised by their national security and 
intelligence agencies. Lacking an external coordinating mechanism, objections 
raised by national security and intelligence officials were, for the most part, 
disregarded. 

COCOM is the only organization involved in controlling high technology that requires 
international coordination. Some (but not all) licenses must be submitted to COCOM 
and must obtain the acceptance of all the member states before the license can be 
agreed. This is what made COCOM a powerful tool for controlling strategic 
technology to the Soviet Union during the 1980's. 

A similar mechanism is urgently needed if weapons of mass destruction technology 
are to be controlled effectively. If the administration wants to be taken seriously on 
the question of proliferation, then it has to insist on a coordinated mechanism for 
implementing effective controls. 



A Counter Proliferation Defense Program 

COCOM-type strategic export controls were always part of a defense program aimed 
at maintaining the balance of power. Because this was so, the strategic export 
control policy could be aimed in ways that harmonized with our defense programs. 
For example, as our weapons increasingly depended on computer and 
microelectronics technology, one vital way to block the Soviet drive to enhance its 
military capacity was to prevent their acquisition of these enabling technologies. 
Indeed, this example is also one of the major success stories of the 1980's and put 
the Soviet military at a disadvantage from which it could not recover. 

A control strategy needs to be coherently linked to defense programs. Without 
defense programs aimed at the WMD threat, technology controls are not enough to 
do the job. 

We were in a vacuum on Iraq and it was extraordinarily dangerous. We could not find 
Saddam's SCUD missiles (despite claims to the contrary); and once they were 
launched we did not fully destroy them when they were intercepted. We had no 
answer at all to the "Big Gun" which, luckily, wasn't ready for the war; and we had not 
prepared our targeting of Iraqi assets until very late in the game. Defensively, our 
troops were not well trained against potential chemical and biological attacks and in 
many cases were poorly equipped. 



102 



A strong case can be made to prepare ahead of time a comprehensive strategy 
against WMD weapons, technologies and support systems. Appropriate 
countermeasure technologies need to be developed that can be used against WMD 
delivery systems and command and control assets. When such a strategy is clearly 
underway, it is possible to shape technology controls to support the strategy. 

In particular we need a comprehensive counter missile program that must include 
destroying launch sites, in the air destruction of launched missiles, and crippling 
command and control assets supporting the deployed missiles. Bringing NATO in on 
this problem might prove to be a very attractive way to demonstrate we are seriously 
interested in counter proliferation. 

A useful step would be to make counter proliferation a separate part of the U.S. 
Defense budget. That would require the administration to define its counter 
proliferation program clearly and set goals that can be met. 



Political Isolation of Specific Threats 

One problem in counter proliferation strategy is political. In the case of Iraq, for 
example. Western countries were universally on the right political side of Saddam 
Hussein until the invasion of Kuwait. Trying to put in place a counter proliferation 
policy before that was very difficult. 

But not impossible. As we now know (and should have known at the time), a 
Saddam Hussein equipped with nuclear, biological and chemical weapons was a 
threat and menace to the whole world. It would have been possible to maintain 
good relations with Saddam before the invasion of Kuwait and still have resisted the 
sale to him of WMD-linked technologies. Had the COCOM countries taken a clear 
course of action, Saddam would not have been able to develop his WMD weapons 
capability so easily. The fact that he had Western support in doing so gave him 
confidence the West did not care. 

Unfortunately, governments were not interested in following a WMD isolation strategy 
toward Saddam. Evidence of this is the lack of useful intelligence on Saddam's WMD 
buildup and, occasionally, poor or misleading estimates including a total 
misunderstanding of Saddam's nuclear weapons programs. 

Today there is a desire to do better (at least we are told that) and intelligence 
collection on WMD proliferation has been stepped up. But what about a policy of 
political isolation? Can we do, in respect to today's proliferators, what we should have 



103 



done yesterday to Iraq? 

The case of China suggests we still have a long way to go. The consensus is that 
China has been selling goods and technology, including missile systems, in 
contravention of the Missile Technology Control Regime that they pledged to respect. 
After months of trying to sweep the issue under the rug, the administration decided 
the Chinese had violated their pledge and imposed sanctions. 

A major weakness of the sanctions is they were not coordinated with our allies. Our 
allies were not asked to impose any corresponding measures. I don't know why the 
administration was unwilling to make an effort with the allies, if they thought the 
Chinese violations were serious. To carry out a sanction without the allies will not 
constrain the Chinese, but it will enrich European companies at America's expense. 

Meanwhile, Europeans will view our ineffective sanctions cynically; the Chinese will 
make their purchases elsewhere; and many will believe that the American counter 
proliferation program is toothless. 

Recommendations 

To be regarded seriously, a counter proliferation has to be focused and consistent. It 
needs high-level leadership that can best be supplied by the United States. But 
leadership is just talk if it is not matched by actions. The U.S. will have to carry out 
its own comprehensive counter proliferation program to convince others to follow. 

A first step is to review the process of export approvals of U.S. technology shipped 
abroad and to tighten up procedures and requirements. Top administration officials 
have to take the lead in scuttling sensitive, controversial, exports such as cruise 
missile technology to China, or they will not have credibility either at home or abroad 
on the subject of counter proliferation. 

Once we get our own house in order, we need to establish an international 
mechanism to coordinate exports of technology from the former COCOM countries. I 
believe we still have the political clout to gain cooperation in this sector, but it will take 
the Secretary of State, perhaps the President, to make the case. Congressional 
action supporting such an initiative would be very helpful. 

At the same time we need to make clear to those acquiring WMD systems that we 
view such acquisition as a threat and we will be prepared for the challenge. 
Strengthening our defense programs for counter proliferation and making it a 
separate part of the Defense budget and Defense strategy of the United States would 
be a positive step. 

Finally, for egregious violations, whether by States or companies, we should be 
pushing for tough, international sanctions. Even the act of setting up a system to 
enforce sanctions will help to reduce the flow of WMD technology. 



104 



STATEMENT BY JOSEPH S. BERMUDEZ JR. 
North Korea and China as Proliferators 

Mr. Chairman, members of the committee...; I would like to thank you for this opportunity 
to present my views of the roles China and North Korea have played as proliferators of 
ballistic missiles and related technology to the Middle East. 

Let me begin by providing a brief overview of bcdlistic missile development within China and 
North Korea. 

China 

Chinas involvement in the field of ballistic missile dates to the mid-1950s and the 
establishment of a indigenous ballistic missUe program. The former Soviet Union played a 
key role in China's early ballistic missile program by providing training, technology transfers 
and R-1 Scunner missiles (a copy of the World War n German A4A'-2). This was soon 
followed by the Soviet delivery of a number of R-2 Sibling missiles (a development of the R-1, 
but still heavily based upon AAfVZ technology). Due to a souring of relations with the 
Soviets, the Chinese were forced to reverse-engineer the R-2. Subsequently producing their 
own version known as the DF-1 (Dongfeng or East Wind) in 1960. These early efforts 
provided the foundation upon which China would indigenously design and produced a long 
series of ballistic missiles and space-launch vehicles (SLV). 

Dunng 1964, China successfully tested the 1,000-1,200 km range DF-2 (Western designator: 
CSS-1). The DF-2 was designed with the intention of being able to strike at U.S. bases on 
Okinawa. Japan. The 2.600-2,800 km range DF-3 (CSS-2) was successfully tested during 
1966, and was designed to strike at U.S. bases at Subic Bay and Clark Field, Philippines. This 
was following in 1970 by the 4.700 km DF-4 (CSS-3) which was designed to strike at U.S. 
bases m Guam. The DF-4 was subsequently used as the booster for CZ-1 SLV. Finally, 
during 1971. China successfully tested the 12-13,000 km range DF-5 (CSS-4) which was 
designed to strike at the continental U.S. The DF-5 was subsequently used as ll>e booster for 
CZ-2/-3/-4 series of SLVs. China is currently pursuing work on a number of more modern 
and capable ballistic missile systems (e.g., DF-25, DF-31 and DF-41) which are expected to be 
operational during the mid to late 1990s. 

To date. China is known to have provided intermediate range ballistic missiles, or 
technologies, to only one country - Saudi Arabia. Durmg 1985, a major arms agreement 
between the two countries was finalized, calling for the sale of approximately 36 DF-3A 
missiles. Deliveries of the missiles began during 1987. Saudi Arabia has never employed its 
DF-3AS. The missiles, however, were on operational stand-by during OPERATION DESERT 
SHIELD/DESERT STORM. Additionally, Saudi Arabia has not re-transferred any DF-3A 
missiles or technologies. 

Although China had received a small number of Soviet R-llFM (a navalLzed version of the SS- 
1 or Scud A) during 1960, and had pursued several abortive projects dunng the 1960s (DF- 
41/611 and 1970s (DF-61), it did not seriously enter the tactical ballistic missile field until the 
mid-1980s. At that time it perceived that there was a financially lucrative market for such 
systems within the Middle East and South Asia. Currently, China has sold, or is marketing, 
three tactical ballistic missile systems. First, is the 600 km M-9/DF-15, which has a payload 
of 1.000 kg. Next, is the 300 km M-ll/DF-11, which also has a payload of 500 kg. Finally, 
there is the 300 km 8610, which has a payload of 500 kg and is essentially a surface-to-air 
missile which has been modified for the surface-to-surface mission. 

To date. China is known to have transferred tactical ballistic missiles and/or manufacturing 
technologies to a number of countries. Iran has received "8610' missiles, and manufacturing 
technologies; M-9/M-11 manufacturing technologies; as well as wide-ranging Chinese 
techmcal assistance for its missUe and artillery rocket industries. Libya has negotiated for M-9 
missiles and manulacturmg technologies; as well as Chinese technical assistance for its 
indigenous missile program. At present, however, there are no reliable 'open source" 



105 



indicators of any significant Chinese involvement in Libya's missile program. Pakistan has 
concluded an agreement with China to purchase both M-9/M-11 missiles and manufacturing 
technologies, however, due to international pressure the delivery of actual missiles has 
apparently now been deferred. Pakistan, however, is covertly receiving manufacturing 
technologies and components. Syria, originally had concluded an agreement with China to 
purchase both M-9 missiles and manufacturing technologies, however, due to international 
pressure this has been canceled. It has been replaced by the delivery of North Korean Scud 
Mod. C missiles and manufacturing technologies; as well as Chinese technical assistance for 
its indigenous missile program. 

North Korea 

North Korea's involvement in the field of ballistic missiles dates to the mid-1970s, when it 
sought to acquire missiles from China. Although China didn't possess short range ballistic 
missiles, the request coincided wath internal interests, and development of a liquid fueled 
tactical ballistic missOe designated the DF-61 was initiated. Due to internal Chinese events 
the project was canceled during 1978. This cancellation led North Korea to initiated it owti 
indigenous ballistic missile program. 

North Korea, however, simply did not possess the skilled manpower or technology to design 
a ballistic missile from the scratch. To overcome this serious limitation. North Korea entered 
into an agreement with Egypt to cooperate in the field of ballistic missile development. The 
most significant aspect of the Egyptian agreement was the transfer a number of Soviet Scud 
B missiles and launchers to North Korea. North Korea now set about reverse engineering 
the Scud B. 

The first fruits of this effort didn't appear untD 1984 when the North Korean Scud Mod. A 
appeared. It is believed to have been a straight reverse-engineered copy of the Scud B, with 
no modifications, and was built in extremely small numbers as a "proof-of-concept" article. 

The rate of progress wdthin North Korea's ballistic missile program remained steady imtil 
mid 1985. When as a result of the ongoing Iran-Iraq War, the Iranian Government 
concluded an agreement with North Korea calling for the bilateral exchange of missile 
technology; Iranian financing for North Korea's missile program; and an Iranian option to 
purchase the soon to be produced Scud Mod. B. This Iranian funding was of vital 
importance to the North Korean Scud program. 

The Scud Mod. B achieved pilot production during 1985, and gradually increased to full scale 
production during 1986. Due to a number of minor modifications the Mod. B was able to 
achieve a 15% increase in operational range compared to that of the original Soviet Scud B - 
approximately 320 km versus 280 km with a 1,000 kg warhead. 

During July 1987 the first North Korean produced Scud Mod. Bs arrived in Iran. Deliveries 
are believed to have continued through early February 1988, for a total of approximately 100. 
These Scud Mod. Bs played a significant role during the 1988 "War of the Cities." In addition 
to the delivery of the Mod. Bs North Korea provided assistance in establishing a Scud Mod. B 
missUe assenibly/production facility in Iran. 

During the laie-1980s North Korea reorganized its missile program along two paths. The 
simpler and quicker path was to only imdertake minor modifications to the basic Mod. B 
system - this would result in the Scud Mod. C. The more complicated, and thus longer term, 
option was a complete redesign of the Mod. B., and would result in the Scud Mod. D (Nodong 
1). 

The 500 km range Mod. C began pilot production during 1989, and gradually increase to full 
scale production during 1991. 



106 



During laie 1990 Iran and North Korea concluded several new agreements which included 
provisions for the Iranian purchase of Scud Mod. Cs and North Korean assistance in 
conversion of an Iranian missile maintenance facility in eastern Iran to first assemble and 
then to manufacture the Scud Mod. C. Beginning in January 1991, shipments of missiles 
and related equipment to Iran had commenced. The exact number of Scud Mod. Cs missUes 
acquired by the Iranians is not presently known, but is estimated to be approximately 100. 

The Iranian agreements were soon followed by an agreement to provide Scud Mod. Cs to 
Syria. Deliveries of an estimated 60 missiles and 12 laimchers began during April 1991. 
Additionally, Libya has displayed an interest in purchasing the Mod. C. 

Although design of the Scud Mod. D (Nodong 1) is believed to have begun concurrently with 
that of the Scud Mod. C during 1989, it understandably proceeded at a much slower rate. The 
first prototypes are believed to have been ready in early 1991. Unlike the earlier models, the 
Scud Mod. D is believed to be a completely redesigned system based upon Scud technology. 
The estimated range of the Mod. D is approximately 1,000-1,300 km, which not only includes 
the enure Korean peninsula but at the 1,000 km range also: Niigata and Osaka, in Japan; 
Khabarovsk in Russia; and Beijing and Shanghai, in China. The 1,300 km range would 
include such cities as: Tokyo and Taipei. 

There is considerable international concern over the Scud Mod. D (Nodong 1). Iran, Libya and 
Syria have displayed an interest in purchasing missiles, and/or the technology to produce 
them. 

Some sources suggest that North Korea is developing a 1,500-2,000 km Scud Mod. E (a.k.a.: 
Scud X and Nodong 2) as a follow-on to the Mod. D (Nodong 1). If this is correct, this system 
is most likely only in the design stage at present and is unlikely to be seen in prototype form 
until after 1995. 

One of the primary reasons for the long development period for North Korea's extended 
range missiles is that in order to achieve a range of 1.500-2,000 km using Scud-type 
technologies the use of either multi-staging or clustering is required, significant technologies 
%vith which North Korea has no experience. The recent incident in which a number of 
Russian missile designers were prevented from traveling to North Korea is noteworthy. 
These personnel were from the Makeyev design bureau which was responsible for Scud 
design, and could have addressed North Korea's weakness in multi-staging or clustering. 





DF-61 


ScudB 
R-17E 


Scud 
Mod. A 


Scud 
Mod. B 


Scud 
Mod. C 


Scud 
Mod. D 


Scud 
Mod. E 


a.k.a. 








ScudB 


ScudC 
Scud PIP 


Scud D 
Nodong 1 
Rodona 1 


ScudX 
Nodong 2 
Rodona 2 


Range ikm) 


600 


280-300 


280-300 


320-340 


500 


1.000- 
1.300 


1,500- 
2.000 


Warhead Ikq) 


1.000 


1.000 


1.000 


1,000 


700-800 


800 


9 


North Korean 
I.O.C. 


NA 


1981 


1984 


1985 


1989 


1993 


1995-98 



Characteristics of North Korean Scud Variants 



Egypt 

During the 1950s and 1960s Egypt unsuccessfully pursued several indigenous programs in 
an attempt to achieve a ballistic missile capability-. It wasn't until the early 1970s, however, 
when the former Soviet Union provided a small number of Scud B systems, that it finally 



107 



attained such a capabUity. During the subsequent 1973 October War, Egypt became the First 
nation to employ ballistic missiles in combat since World War n, when it launched three 
Scud B missiles at Israeli positions on the Sinai peninsula. 

Following the 1973 War Egypt initiated a modest program to maintain and upgrade its 
inventory of Scud B missile systems by replacing Soviet parts with indigenously produced, 
or foreign purchased, components. By the early 1980s this modest program evolved into a 
program to develop three ballistic missile systems: the RS-120, the Condor EL'Vector and a 
product-improved Scud. 

The RS-120 missDe program began during 1986-1987, when Egypt approached the CONSEN 
Group firm of IFAT seeking assistance in developing a new ballistic missile. IF AT sub- 
contracted with the German firm of Messerschmitt-Boelkow-Blohm (MBB) and the Italian 
firm of SNIA. The initial goal of this project was to develop a missOe with a range of 120 km. 
There are, however, indications that the ultimate goal was the development of a much longer- 
ranged missile. Little progress was made on this project when, due to international pressure 
upon MBB and SNIA, the project was canceled during 1988. 

The Condor IIA'ector program was a project, begun during late 1982, to produce a 800-1,000 
km range ballistic missile in cooperation with Argentina, the CONSEN Group, and Iraq. 
This missile is known in Argentina as Condor 11, in Egypt as Vector and in Iraq as Badr-2000. 
The initial plans are believed to have called for Argentina to complete the construction and 
testing of 10 missiles. Five of these were to be delivered to the Egyptian Ministry of Defense 
and five delivered to Iraq. Each of the three countries would then procure 200 missiles. Both 
the Egyptians and Iracps anticipated that they would then begin production of additional 
Condor EI missUes in their respective countries by the end of the 1980s. To expedite 
development, the CONSEN Group acted as a go-between for a number of well established 
European firms that were providing key components for the Condor II project, including; 
MAN and MBB of West Germany, Sagem of France, and SNIA-BPD of Italy. 

By mid-1988, as a direct result of the considerable U.S. political pressure, arising-from the 
arrest in the U.S. of Abdel Kader Helmy, Egypt officially withdrew from the Condor n 
project. This was marked by the formal cancellation of the contract between the Egyptian 
Ministry of Defense and IFAT during July 1988. This Egyptian withdrawal resulted in Iraq 
stopping its financial support for the project. 

Although the cancellation of the Condor n project was a significant blow to ballistic missUe 
development within Egypt, it wasn't a complete loss. The project provided Egypt with 
practical experience in a number of areas and resulted in the transfer of a large body of 
missile related technology to Egypt. These benefits could be applied to the product-improved 
Scud B program. 

The Egyptian product-improved program (variously identified as "Scud B-lOO" or "Project 
T") dates to the late 1970s. When North Korea and Egypt concluded an agreement 
concerning the exchange of missile technologies and personnel. More sigruficantly, Egi'pt, in 
violation of its agreement with the Soviet Union, transferred a small number of Scud B 
missiles to North Korea. 

With North Korea's attainment of Scud Mod. B production status during 1987, published 
repons began to surface that North Korea was assisting Egypt wdth an improved Scud B 
program. These accounts were followed by additional reports during 1988 and 1989 that 
North Korea was directly involved in assisting with the establishment of an improved Scud 
production facility within Egypt. The extent to which these reports are correct is presently 
unknown. It is currently believed that North Korea provided Eg^pt with liberal access to its 
Scud Mod. B and Mod. C programs, including the technical documentation and engineering 
drawings. During late 1991 and 1992. reports suggested that Egypt would soon commence 
local production of an enhanced Scud. It is currently believed that the EgjqDtian program will 
not produce a copy of the North Korean Scud Mod. B or Mod. C, but instead is concentrating 



108 



upon its owTi derivative of the Scud B (possibly incorporating some of the North Korean 
modiFications). To dale there is no confirmed evidence that Egypt has either produced an 
product-improved Scud B based upon North Korean technology, or purchased Scud Mod. Bs 
or Mod. Cs. 

The ballistic missile related cooperation between Egypt and North Korea has been significant, 
and unquestionably beneficial to both countries. It is likely to continue at its present level for 
the foreseeable future, as is indicated by the continued exchange of high level political and 
militao' delegations. It is probable that Egypt v^^ill be granted access to the Scud Mod. D 
(Nodong 1) program. 

Egypt has also obtained technologies and assistance from other countries for its produa- 
improved Scud B program. Ahdel Kader Helmy covertly obtained U.S. technologies during 
the late 1980s. During June 1990, China and Egypt are reported to have concluded an 
agreement, which called for China to update Egypt's Sakr Factory for Developed Industries to 
allow it to produce "...newer versions of Soviet anti-aircraft missiles, the surface-to-surface 
Scud B and Silkworm..." During late-1991 the U.K. Government brought pressure on 
British Aerospace (BAe) to halt the production of Scud components by Arab British 
Dynamics (ABD) of Egypt. By late 1992, ABD claimed that it intended to terminate its 
production plans for the product-improved Scud B program. 

Egypt currently deploys only the Soviet supplied Scud B missile. The current status of the 
product-improved Scud B program is obscure. It is, however, currently believed that the 
program is at an advanced stage. Given the proper political climate and financial resources 
Egypt could promptly produce a product-improved Scud B missile. 

Iran 

When the Iran-Iraq war commenced in 1980, Iran possessed virtually no ballistic missile 
capabilities. By the end of that eight-year long war, the situation had changed dramatically. 
Iran had attained a ballistic missile capability that included: design and production of simple 
battlefield support missiles (e.g., ranges less then 300 km) and assembly and maintenance of 
foreign supplied ballistic missiles (e.g.. North Korean Scud Mod. B and Chinese "8610"). It 
had also established the basic infrastructure upon which it initiated the indigenous design 
and manufacture of short range ballistic missiles (e.g., 300-1,000 km). These capabilities, 
however, were achieved at tremendous financial costs and with considerable assistance from 
China and North Korea. The war also provided Iran considerable combat experience in the 
employment of ballistic missUes. Iran was the target of approximately 350 Iraqi Scud B and 
al-Husayn missiles. The Iranians launched approximately 120 Scud Bs and Scud Mod. Bs. 

Today Iran deploys a number of ballistic missile systems and is pursuing (with considerable 
assistance from China and North Korea) a multifaceted ballistic missile program. This 
program can be divided into two broad categories - battlefield support missiles and short- 
range ballistic missiles. 

The battlefield support missile segment of Iran's ballistic missOe program dates to the very 
beginning of the Iran-Iraq war. It grew out of the effort to design and manufacture several 
families of short-range artillery rockets and these would eventually include the Oghab, 
Shahin 1. Shahin 2. and others. During early 1988, and after overcoming a number 
obstacles, Iran began production of its first battlefield support missUe - the Nazeat 
(sometimes referred to as Mushak-120 because of its 120 km range, or Nazeat 6). Since that 
lime Iran has tested and apparently deployed an number of improved Nazeat family missiles. 
Iran is currently preparing to produce the Nazeat 10 with a range of 150 km and has been 
working on version with a 200 km range. Both the short-range artillery rocket and battlefield 
support missile programs have received extensive assistance from the Chinese. 

The short-range ballistic missile segment of Iran's ballistic missOe program can itself be sub- 
divided into two broad components based upon the source of foreign assistance - North 



I 



109 



Korea or China. There are conflicting indications as to the level of coordination and 
integration of this North Korean and Chinese assistance within Iran. 

The North Korean component dates to the early 1980s when Iran approached both North 
Korea and China seeking missile technology and ballistic missiles in the Scud B class. During 
late 1983 Iran agreed to provide long term financing for North Korea's Scud Mod. B 
program. In exchange. North Korea agreed to provide Iran wath Scud Mod. Bs as soon as 
they became available and to assist Iran in establishing the infrastructure required to first 
assemble, and then manufacture, the missile. Apart from the Egyptian transfers of Scud Bs, 
the Iranian financing has proved to be one of the primary factors contributing to North 
Korea's ability to achieve a meaningful indigenous tactical ballistic missile production 
capability during the 1980s. 

During 1985, while wailing for the production and delivery of the Scud Mod. B, Iran was able 
to obtain a very small number of Scud Bs from Libya. These missiles were employed almost 

immediately to strike at Baghdad. 

The first Scud Mod. Bs arrived in Iran during late 1987, with deliveries being completed by 
February 1988 (a total of approximately 100 missiles). These missiles were subsequently 
employed by Iran during the "War of the Cities," during which Iran launched approximately 
80 Scud Mod. Bs. 

With the end of the Iran-Iraq war during August 1988, Iran re-doubled its ballistic missiles 
efforts. Agreements were soon concluded with North Korea to for: continued Iranian 
funding of the North Korea's Scud program, the supply of additional Scud Mod. Bs. During 
1990 these agreements were amended to include: the purchase of the Scud Mod. Cs and 
North Korean assistance in conversion of an Iranian missile maintenance facility to first 
assemble and then to manufacture the Scud Mod. C. The first shipments of Scud Mod. Cs 
and related equipment arrived during early 1991. 

During the early 1990s, Iran, North Korea and China have jointly worked to assist Syria 
develop an indigenous ballistic missile capability. Both Iran and Syria have also entered into a 
number of agreements concerning the joint production of the Scud Mod. C. 

At present Iran deploys both the Scud Mod. B and Mod. C; has the capability to assemble and 
maintain both missiles; and is developing the ability to manufacture the Mod. C. More 
significantly, Iran and North Korea have apparently concluded agreements which provide for 
both the future purchase of the 1,000 km Scud Mod. D (Nodong 1) and North Korean 
assistance in converting the Iranian Scud Mod. C facility to assemble/produce the Scud Mod. 
D. An Iranian delegation was present for the May 1993 test launching of four Scud Mod. D 
missiles in the Sea of Japan. 

The Chinese supported component of Iran's ballistic missile program slightly pre-dates that 
of the North Korean component and has its roots in Chinese assistance with the early Iranian 
artillery rocket program. An accurate "open source" assessment of the post-war Iranian- 
Chinese ballistic missile related activities is difficult. There have been numerous reports 
concerning the direct transfer of M-9 and M-11 missUes, but there is no hard evidence to 
support them. 

At present, the best estimate of these Chinese activities is that as a result of agreements 
signed during 1988, China agreed to provide Iran with the follovwng, 

• "M-class" missile technology required to produce ballistic missiles with 
ranges of 600-1,000 km. This included the training of Iranian engineers and 
technicians and the provision of Chinese advisers. 

• Equipment and technical assistance in developing the infrastructure 
required to indigenously design, test and produce such missiles (e.g., 
manufacturing equipment, test range instrumentation, etc.). 



no 



• Coniinued assistance in designing and manufacture artillery rockets and 
baiiJefield support missiles. 

• The sale, during 1990, of a small number of the short-range (120-130 km) 
"8610" missiles and assistance in converting existing Iranian facilities to 
produce it. 

There are numerous conflicting reports concerning the status of Iran's missile program. 
During March 1989 it was reported that China was assisting Iran establish a facility, located 
in northeastern Iran, to manufacture an 800 km missile. By the end of 1990, launch range 
and test facilities are believed to have been completed. During May 1991, several reports 
emerged indicating that China was assisting Iran with the building and continued 
supervision of production facilities for HY-2 SUkworm anti-ship and "M-class" missiles. By 
March 1991. Iran is reported to have tested at least two new ballistic missiles, one uath a 
range of 700+ km, and a second with a range of 1,000+ km. Since the range of the Scud Mod. 
C is 500 km, these missDes are believed to have been the products of the Iranian-Chinese 
program. Various reports suggest that the 1,000 km missile is identified as either Tondar-68 
or -88, and that it is based either upon Chinese or Brazilian technology. No additional 
information has come to light concerning either of these systems. 

Finally, during early 1993, reports surfaced that suggested Iran had both purchased the 
design of the 950 km Libyan al-Fatah ballistic missile and had received several prototype 
Chinese DF-25 missiles for testing. At present, these reports can't be confirmed, however, 
and for a variety of reasons would appear to be somewhat inaccurate. 

Libya 

Libya acquired its fu-st ballistic missile system, the Soviet Scud B, during the 1970s. Since 
that time Mu'ammar al-Qadhdhafi has sought to attain an indigenous ballistic missile 
capability for Libya. During 1980, Libya concluded an agreement with the West German 
company OTRAG to develop a ballistic missile infrastructure, and to produce research 
rockets and ballistic missiles. Although, OTRAG was soon forced to quit the program due to 
political pressure, development continued spasmodically with the assistance of West German 
technicians. By 1987, reports indicated that Libya was developing a 500-700 km ballistic 
missile based upon the original OTRAG design under the code named Ittisalt. It could be 
armed with either conventional or chemical warheads. 

Concurrent with these efforts, during the mid 1980s, Libya entered into a number of 
agreements with Brazilian firms concerning the acqiusition of artillery rockets (SS-40 and SS- 
70), missiles and related technologies. The results of these agreements on Libya's ballistic 
missile program are presently unclear and they may have been combined (or superseded the 
earlier OTRAG based program) into a project to develop the 950 km range ballistic missile 
knowTi as al-Fatah. None of the missiles resulting from any of the indigenous projects, 
including the al-Fatah. are knovra to have reached operational status. Most have failed during 
early test phases. 

During 1986, Libya launched two of its Scud B missOes at U.S. facilities on the Italian island of 
Lampcdusa in retaliation for the U.S. air raids on Libya. Due to the fact that the missDes 
lacked the range to reach the island and the missiles fell short into the Mediterranean Sea. 

Several times during the mid 1980s Libya attempted to purchase SS-21 and SS-23s from the 
Soviet Union, but was re-buffed on each occasion. Libya, reportedly, also approached China 
seeking to purchase the DF-3A, but Chinese were not willing to discuss the matter. During 
1988. however, Libya successfully entered into negotiations with China for the purchase of 
the M-9. These negotiations apparently were linked udth similar Syrian efforts to purchase 
the M-9. Whether or not an actual agreement was signed is unknown. Following, however, 
considerable U.S. pressure during 1989, China agreed not to sell the M-9. Following this 
abrupt turn of events, Syria (which had concluded an agreement with China) and Libya 
entered into negotiations with North Korea. 



Ill 



Sometime during 1991, Libya and North Korea are believed to have concluded an agreement 
for the future Libyan purchase of Scud Mod. D (Nodong 1) missiles and/or related 
technologies. In return for signing this agreement North Korea received an immediate 
infusion of foreign capital which has facilitated its ballistic missile development program. 

At present Libya deploys the Scud B, is continuing work on its indigenous al-Fatah ballistic 
missile, and is cooperating with North Korea. Libya is not known to have received the Scud 
Mod. B or Mod. C. 

Syria 

Although Syria received its first ballistic missile - the Scud B - from the former Soviet Union 
shortly after the 1973 October war, its current ballistic missile program has its roots instead 
within both the doctrine of "Strategic Parity" and the dramatic Syrian defeat in Lebanon 
during 1982. The doctrine of "Strategic Parity" calls for Syria to develop its military and 
economic capabilities to the point where it has the capacity to wage a one-on-one war with 
Israel and wan. Integral with this strategy was the development of a capability to threaten 
Israel's strategic rear (e.g., with ballistic missiles and unconventional weapons) and to defend 
its own airspace from the Israeli Air Force. In effect, the strategy seeks to redress the 
traditional Israeli advantages. 

By 1982, Syria had made, what it believed, were significant strides towards achieving 
"Strategic Parity." The June war in Lebanon, and Syria's dramatic defeat, however, 
highlighted the fact that Syria still had a ways to go. Particularly, during the war Syrian air 
and air defense forces were woefully outclassed and Syria had no viable capability to threaten 
Israel's strategic rear. As a result, the Syrians bitterly complained that the major reason for 
their defeat was that they had received only inferior weapons and training from the Soviet 
Union. In response to this criticism the Soviet Union quickly agreed to provide more modem 
and capable weapons systems and increased training. High on the Syrian shopping list were 
sophisticated SAMs and SSMs, in particular the SA-10 and SS-23. The Soviet Union believed 
that Syria's requests were excessive and would upset the military balance vis-a-vis Israel, so 
instead they provided SA-5s during early 1983 and SS-21 Scarabs later the same year. This 
was followed by the delivery of SSC-lb Sepal coastal defense missiles in 1984. WhDe these 
systems did provide a significant improvement, they still did not provide the strategic 
capabilities the Syrians were seeking. 

The Syrians were not pleased with the way in which they were being treated, so concurrent 
with their efforts to obtain SS-23s they also embarked on a project to develop the requisite 
infrastructure to indigenously produce SSMs. This indigenous project would apparently first 
seek to update existing stocks of Soviet supplied Scud Bs and SS-21 missiles (i.e., the design 
and production of improved conventional and chemical warheads). It would then e.xpand 
either into the reverse engineering of a Soviet missUe, or into the production of a foreign 
designed missile. These efforts apparently did not proceed far before it was realized that Syria 
possessed neither the monetary resources, nor a sufficiently developed industrial base to go it 
alone. Realizing this, Syria approached at least one western European country seeking 
assistance. The duration and extent of this western assistance, if any, is presently unknown. 
It is believed, however, to have been minimal at best. 

Concurrent with these efforts to acquire advanced ballistic missiles, Syria was also developing 
the capability to indigenously produce chemical warfare agents and chemical warheads for its 
missile forces. By early 1986, Syria had produced chemical warheads for its Scud Bs and 
possibly SS-21S. Exactly how and where Syria acquired this technology is uncertain. It is 
possible that North Korean assistance was a major factor. 

During 1986 Syria made another, more emphatic, request for the purchase of SS-23s. The 
Soviet's, apparently, gave this request serious consideration and had possibly even concluded 
a tentative agreement. By mid 1987, however, the Soviet Union had publicly stated that it 



112 



was not going to supply Syria with SS-23s (this was probably a result of the U.S. -Soviet INF 
Treaty). Angered by the Soviet decision, the Syrians, during 1988, concluded an agreement 
with China for the purchase of the M-9. This purchase was to be funded, in part, by aid 
received from Iran. Libya and Saudi Arabia 

Follov^^ng a December 1989 visit to Beijing by U.S. National Security Adviser Brent 
Scowcroft the Syrian-Chinese missile agreement was abruptly canceled. In the wake of this 
canceUation a series of interrelated programs/agreements were established to provide Syria 
with an indigenous ballistic missile production capability. In brief, these 
programs/agreements include, 

• China would no longer provide Syria with M-9 missiles, but instead would 
provide increased technical assistance to Iran's ballistic missile program. 

• In turn, Iran would fund and provide technical support for the 
construction/conversion of a Syrian facility to produce the North Korean 
Scud Mod C. 

• North Korea would provide Syria wath long-term technical assistance with 
the facility and in the shon-term supply a number of Scud Mod. C missiles 
and launchers. 

• China would then provide technologies and technical assistance for this new 
Syrian ballistic missile program. 

• In addition to the Iranian backing, financing was provided both directly and 
indirectly from Libya and Saudi Arabia. 

• With the money received from these programs/agreements North Korea 
would continue its Scud Mod. D (Nodong 1) development program. Access 
to which would be provided to Iran. Syria and Libya. 

In addition to this Iranian and Chinese assistance. Syria has made efforts to obtain European 
technology and manufacturing equipment to suppon its new Scud Mod. C program. 

At present, Syria deploys: Soviet supplied Scud B and SS-21 ballistic missiles; Soviet supplied 
SSC-lb coastal defense cruise missile; and Nonh Korean supplied Scud Mod. C ballistic 
missiles. It has also achieved, or will in the very near future, the capability to assemble the 
Scud Mod. C from components. It is presently unclear when Syria will attain an Scud Mod. C 
production capability. When the North Korean Scud Mod. D (Nodong 1) enters production. 
It is possible that S>Tia will seek to acquire and/or produce it. 

Export Controls 

Before concluding, please allow me make a few brief comments on export controls. The 
effectiveness of export controls in containing ballistic missile proliferation within the Third 
World is somewhat problematic. It is clear that such controls have not stopped proliferation. 
They have, however, on occasion proven to be effective. 

The crux of the problem is that as long as nations perceive the need for ballistic missiles they 
will .seek to purchase, or produce, them. We should remember that the technology' to 
produce Scud type missiles is 50 years old and readily available even to technologically 
back-vA'ard countries such as Nonh Korea. We know, however, that some countries are 
seeking much more sophisticated missiles, the technology' for which is not necessarily that 
accessible. As our experience with the Condor n program has shown, such programs are 
much more Milnerable to external constraints. 

The fact that we cannot stop all missile proliferation, does not mean that we shouldn't tr>', or 
that we ignore the issue. It is better to have a number of nations armed uith short-range, 
crude and unreliable missiles, then nations armed with long range, accurate and reliable 
missiles. 

It is clear that the threat of ballistic missile proliferation in the Third World is real and the 
danger to the United States and its interest are increasing. This threat must be met in a 
forthright, intelligent and creative manner. 

Mr. Chairman, once again, thank you for your time and consideration. 



113 



TESTIMONY OF RAMON P. MARKS, ESQ. 

MARKS 6 MDRA8E 

NEW YORK, NEW YORK 

BEFORE THE H0D8E FOREIGN AFFAIRS 

SUBCOMMITTEE ON INTERNATIONAL SECURITY, 

INTERNATIONAL ORGANIZATIONS AND HUMAN RIGHTS 

TUESDAY, SEPTEMBER 14, 1993 



Mr. Chairman and members of the Committee, I want to 
thank you for giving me this opportunity to testify on U.S. 
proliferation policy toward rogue regimes. I wish to emphasize, 
however, that my perspective on this issue is somewhat different 
from those of other members of this panel since I am a practicing 
lawyer not a policy expert. I will try to share that legal 
experience today with some ideas and comments on both future 
potential policy options, and on current law, so as to help this 
Subcommittee as it continues its important work in designing a 
new system for containing proliferation in the post Cold War era. 

On the general issue of sanctions laws, I think there 
is a great deal of confusion over their role as a viable legal 
option in the foreign policy process. A case in point are the 
legal measures recently invoked by the Administration against 
China under the Missile Tech Control Regime ("MTCR") for alleged 
shipment of M-11 missile technology to Pakistan. These sanctions 
were invoked pursuant to Section IIB of the Export Administration 
Act, and could result in the loss of approximately $1 billion 
worth of export business for Hughes Aircraft and other U.S. 
companies to China. Hughes and others will not be granted export 
licenses to sell such equipment to China for a period of two 
years. While Hughes will lose the business, China will not be 
hurt. They can easily find the technology sanctioned by the 
United States from other sources, such as British Aerospace, or 
Aerospatiale or Alcatel in France. Although the State Department 
will try to persuade our allies not to take advantage of our 
self-imposed restraint, past experience shows that some foreign 
company may well jump in to grab the business the Administration 
has forced Hughes to give up. 

This point on sanctions legislation can also be made 
with equal force on unilateral export controls. Iran is a good 
example. Recently, Boeing sought U.S. export license authority 
to sell jet aircraft to Iran, but was refused due to State 
Department policy considerations. It is feared that Airbus will 
get the deal instead, notwithstanding any efforts by our State 
Department to persuade our European allies to block this 
potentially lucrative sale, as well. Meanwhile, in the wake of 
U.S. China sanctions, the Chinese are already planning to go on a 
major shopping spree this month in Germany sponsoring a major 
trade tour. Among the shoppers will be Norinco, China's largest 
weapons manufacturer with sales exceeding $1 billion annually. 



114 



During the trade tour German machine tool manufacturers are 
looking forward eagerly to making new sales with China, and no 
doubt to capitalize on any U.S. policy qualms on trade with that 
country. 

I read in the newspaper recently that a report will be 
issued shortly by the Institute for International Economics 
indicating that U.S. business will lose this decade up to $26 
billion a year in foreign sales because of export controls. 
There can be no doubt but that a large portion of those lost 
opportunities for American exports and jobs will instead go to 
overseas competitors. An example is Lufkin Industries which 
helplessly watched a Canadian competitor sell oilfield pumps to 
Libya while Lufkin complies with the broad based U.S. embargo 
against that country. 

This is a policy problem that deserves scrutiny by your 
Subcommittee Mr. Chairman to consider possible solutions. U.S. 
business is right. Why should they exercise forbearance if 
others don't? The real challenge for proliferation policy in the 
1990 's will be how to make any reformed export control system 
truly multilateral. Mere arm-twisting tactics to try to persuade 
allies to follow our lead are obviously not enough. I believe 
that there are creative legislative options that can be explored 
to encourage the growth of a truly multilateral nonproliferation 
regime for the post Cold War world. 

Unilateral sanctions and export controls are not useful 
policy tools when the only people hurt are U.S. workers and 
businesses. A unilateral approach to proliferation policy makes 
no sense if others supply the technology we want to withhold. A 
colleague and distinguished trade lawyer here in Washington, Eric 
Hirshorn, made the point aptly in a recent press quote: "This is 
like asking US exporters to jump off a diving board into an empty 
pool with a promise to get our competitors to fill the pool 
before we hit bottom." Beyond persuasion what then can we do? 

Mr. Chairman, we have only to look at a little noticed, 
obscure provision of the Export Administration Act to see the 
seeds of a new concept that could put real teeth into the idea of 
promoting a truly multilateral counter-proliferation policy. 
Section llA of the Export Administration Act was passed in the 
wake of the Toshiba affair back in 1987 as a remedy to deal with 
COCOM export control diversions by foreign persons. Although 
never used since its passage, this statute could form the basis, 
with some adaptation, of a new mechanism for promoting better 
multilateral cooperation on export control enforcement. In 
essence. Section llA authorizes the President to impose sanctions 
against any foreign person that violates COCOM promulgated, 
export control restrictions by barring their imports into the 
United States for a period not to exceed five years. 



115 



Unfortunately, Section llA deals only with COCOM 
diversions. It does not apply to any violations of the MTCR, NPT 
or Australia Group regimes. Back in 1987 we were more focused on 
Cold War export control issues than in dealing with potential 
Sadaam Husseins. Those policy priorities have now changed 
dramatically, and we need to bring our laws around to better meet 
new challenges that are no longer COCOM and Cold War based. 

For example, if we are really serious about denying 
China access to satellite technology for selling M-11 missile 
parts to Pakistan, then we should be equally prepared to take 
action against any foreign company that converts that business 
for itself if their home country is also a signatory to the MTCR 
regime. A foreign concern that sells China satellite technology 
that we have prohibited Hughes from selling should face the 
prospect of losing its right to sell goods to the American market 
for a period of time. Why take jobs away from the American 
economy only to give them to foreign competition? If the State 
Department is willing to impose sanctions taking up to $1 billion 
worth of business from Hughes Aircraft, then State should be 
equally willing to take tough action against non-U. S. companies 
who want to capitalize unfairly on our forbearance, which is only 
designed to help uphold multilateral accords. 

It would not be difficult to draft legislation 
patterned after Section llA of the Export Administration Act to 
give our government the right to take action against any foreign 
person that sells goods or technology in violation of a 
multilateral nonproliferation accord such as the NPT, the MTCR, 
the Australia Group or COCOM. This type of action would be 
particularly appropriate in situations where the United States 
has restricted U.S. business from exporting products to 
particular countries pursuant to multilateral accords. 

Such legislation could have a startling impact on the 
dynamics of the multilateral enforcement process. U.S. business 
would no longer be a sacrificial lamb on the mantle of unilateral 
export control and sanctions policies. If we denied ourselves 
the business, then U.S. workers could also rest assured that 
foreign competitors who sought to capitalize on our self-imposed 
restraint would face the loss of selling their products in the 
U.S. market for an appropriate period of time. If the State 
Department hesitated to take such action against non-U. S. 
opportunists because of foreign government sensibilities, imagine 
the political outcry that would erupt in the United States. Why 
would our government be willing to force U.S. business to forgo 
export sales, but then refuse to apply comparable import 
restrictions against a foreign competitor that took advantage of 
the U.S. embargoed sale? 



116 



The potential of this idea can be practically 
illustrated by again considering Iran. At the insistence, I 
understand, of the State Department, Boeing has been prohibited 
from selling aircraft to Iran. If Airbus were to take the deal 
instead, why should our State Department not be equally willing 
to declare that Airbus will lose the right to sell its products 
in the United States for say, two years? The multilateral 
enforcement legislation I suggest could have a huge impact on the 
dynamics of enforcing various nonproliferation regimes. Any time 
our Government decided to prohibit exports to certain countries 
based on multilateral agreements, the State Department would know 
that it could also be forced to take action against any foreign 
companies that took actions undermining our export forbearance. 
In fact, the knowledge that unilateral export control decisions 
could lead to blocking imports of offending foreign companies 
could even encourage our State Department to be more prudent in 
calling on U.S. business to make such sacrifices. At the same 
time, if State made the decision for strong unilateral action 
under an international proliferation accord, U.S. business would 
know that the likelihood of seeing their sacrifice undone by 
foreign competitors would be substantially diminished. 

Mr. Chairman, it is difficult to see how the State 
Department could argue against the type of legislation I am 
suggesting. If they are prepared to force American companies to 
exercise restraint from time to time for the cause of 
nonproliferation. State should make sure that the sacrifices of 
U.S. business are not undone by foreign competition. The State 
Department cannot have it both ways. If American business is 
forced to suffer then so should foreign friends who are committed 
to the same nonproliferation accords. Just as our government has 
the right to restrict U.S. exports, it has the same corresponding 
right to restrict imports into the United States. Section llA of 
the Export Administration Act should be broadened to cover not 
just COCOM, but also all other multilateral non-proliferation 
accords. 

Mr. Chairman, so far I have focused on what we can do 
legislatively to help possibly promote better multilateral 
cooperation in the future in situations where our government 
decides that unilateral export controls are necessary consistent 
with various multilateral, nonproliferation agreements. I was 
also asked by you to assess our existing policy tools for 
preventing proliferation of weapons of mass destruction. On this 
issue I would like to focus on one statute in particular, the 
Iran-Iraq Arms Proliferation Act of 1992. Passed as part of the 
National Defense Authorization Act for Fiscal Year 1993, this 
statute calls for a comparable system of export controls against 
both Iran and Iraq. 



117 



I am concerned, however, that the law passed by 
Congress has not been carried out and obeyed. Specifically, 
Section 1603 of the Iran-Iraq Act expressly requires that all 
export controls prescribed against Iraq under Section 586G(a) of 
the Iraq Sanctions Act of 1990 "shall be applied to the same 
extent and in the same manner with respect to Iran." Although 
the statute has been in effect for almost one year, the Commerce 
Department still maintains in place conflicting regulations that 
seemingly would allow the export to Iran of commodities now 
forbidden for export to that country by Section 1603 of the Iran- 
Iraq Act. While the Commerce Department may assert that in 
practice it has been following the broader requirements of the 
Iran-Iraq Act notwithstanding its conflicting regulation, I am 
concerned that the Department has allowed an illegal rule to 
stand on the books for practically a year since over-riding law 
was passed. Specifically, under Section 785.4(d) of its 
regulations, the Commerce Department still retains for itself the 
discretion to license for export to Iran commodities destined for 
civilian end-use but covered by foreign policy or national 
security controls. This regulation violates Section 1603 of the 
Iran-Iraq Act. 

Particularly in the wake of Iraqgate, I am surprised 
that the Commerce Department failed to adjust its regulations 
promptly to comply with statutory law. As a lawyer, it disturbs 
me that a federal agency would feel comfortable in leaving a 
regulation in force for such a long period of time that is 
diametrically inconsistent with controlling law. Even worse, if 
the Commerce Department has issued any licenses pursuant to its 
illegal regulation since the Iran-Iraq Act was signed into law on 
October 23, 1992 the situation is far more serious. 

On this score, Mr. Chairman, I have some concerns. I 
understand that since October 1992 the Commerce Department may 
have issued licenses for export to Iran of commodities in 
possible violation of the Iran-Iraq Act. Your Subcommittee Staff 
has supplied to me for legal assessment information indicating 
that a number of commodities have been shipped to Iran under G- 
Dest licensing classifications authorized by the Commerce 
Department. If, however, any of those commodities were placed on 
the commodity control list pursuant to foreign policy controls 
prescribed by Section 6 of the Export Administration Act then, 
consistent with the Iran-Iraq Act's prohibitions, they should 
never have been allowed. 

This is not the only possible violation of the Iran- 
Iraq Act over which I am concerned. I understand that since 
October 23, 1992, the Commerce Department follows a policy of 
contract sanctity allowing the issuance of individual validated 
licenses for export to Iran of items covered by foreign policy 
and/or national security controls on the theory that the 



118 



contracts covering such transactions were executed prior to the 
date the Iran-Iraq Act became law, i.e. . October 23, 1992. 

The problem is I can find no language in the Iran-Iraq 
Act legally authorizing the Commerce Department to issue licenses 
based on contract sanctity. In my legal judgment, the Commerce 
Department has no legal authority to apply a policy of contract 
sanctity on exports to Iran. In part, I draw this conclusion 
from the fact that under another statute, the Iraq Sanctions Act 
of 1990, on which the Iran-Iraq Act is closely patterned, there 
was included by Congress statutory language. Section 586G(b) , 
expressly authorizing the Commerce Department to invoke contract 
sanctity for purposes of licensing exports to Iraq. 

Under standard rules of statutory construction, if 
Congress had similarly wanted to authorize the Commerce 
Department to apply contract sanctity under the Iran-Iraq Act, it 
would have expressly done so by using enabling language similar 
to that found in the Iraq Sanctions Act of 1990. There is no 
such language in the Iran-Iraq Act and accordingly, as a matter 
of law, any licenses issued by Commerce on the basis of contract 
sanctity for export of foreign policy or national security 
covered items to Iran have been in my legal judgment unlawful. 

Finally, Mr. Chairman, I wish to turn to two proposed 
pieces of legislation on which you have asked me to comment, 
H.R. 2358 and S. 1172. 

H.R. 2358 would impose sanctions against any foreign 
person that assisted a foreign country in building nuclear 
weapons. Consistent with the comments I have already made today, 
I think the general idea behind this proposed piece of 
legislation is excellent, but I ask why restrict its scope only 
to nuclear proliferation? Why not deal at once with the issues 
of nuclear, missile, CBW and COCOM type proliferation concerns 
comprehensively? We should consider sanctions solutions in the 
context of all multilateral accords dealing with proliferation 
issues, and not just on a piecemeal basis. Another comment I 
have on H.R. 2 3 58 concerns the narrow scope of sanctions it 
contemplates, which would only take away from foreign persons the 
right to engage in business with the U.S. government. I suggest 
adding the specter of import sanctions to put more potential 
deterrent strength into the legislation. 

Turning to S. 1172, its apparent purpose is to plug a 
loophole in the existing Iran-Iraq legislation by expanding 
sanctions to be applicable potentially to foreign persons. Mr. 
Chairman, I for one will be glad if this loophole can be plugged. 
It would help remedy the excessively unilateral cast of the Iran- 
Iraq Act as things now stand. As I have discussed above, it is 
not fair to restrict U.S. companies from doing business with Iran 



119 



if foreign companies will simply get the business instead. 
S. 1172 would help deal with this problem, but I think it should 
also be drafted to make clear that it applies only to violations 
of multilateral proliferation agreements on which international 
consensus on proliferation control parameters are already 
established. I would also respectfully suggest that there is an 
even bigger loophole in the Iran-Iraq Act that needs plugging. 
This is the potential failure of the Commerce Department to carry 
out and obey the Iran-Iraq's requirements that were already 
passed into law on trading with Iran one year ago. 

Those conclude my prepared remarks Mr. Chairman. I 
thank you for this opportunity to testify on these important 
issues. 



120 



BIOGRAPHY OF RAMON P. MARKS 



Ramon P. Marks is a partner in the law firm of Marks & 
Murase, specializing in export control and related complex 
international litigation. Mr. Marks obtained the largest 
punitive damage award in U.S. legal history in a foreign 
sovereign immunity act case, $55 million, against Sadaam 
Hussein's Iraq for abuses and frauds committed against the U.S. 
export control system prior to Iraq's invasion of Kuwait. 

Mr. Marks is 44 years old and graduated magna cum laude 
from Dartmouth College where he was also elected to Phi Beta 
Kappa . He holds, as well, a masters degree in International 
Relations from the Johns Hopkins University School of Advanced 
International Studies. Mr. Marks obtained his law degree in 1976 
from the University of Virginia Law School where he was Articles 
Editor of the Virginia Journal of International Law . He is a 
former U.S. Marine Corps Lieutenant, and a member of the Board of 
Directors and Executive Committee of Business Executives for 
National Security, a Washington, D.C. based "think tank" devoted 
to issues affecting the national security of the United States. 



121 
August 31. 1993 



Honorable Ron Brown 
Secretar>' of Commerce 
Washington. DC 

Dear Mr Secretary. 

In connection with the ongoing interest of the Subcommittee on international 
Secunty, International Organizations, and Human Rights in aspects of arms control, 
disarmament and proliferation issues and international terronsm. I would greatly 
appreciate it if you would instruct the Bureau of Export Administration to supply me with 
the following documents and information: 

1) Copies of the Commerce Depanment's Yearly Report to Congress for the vears 
1989. 1990. 1991. and 1992. 

2) A copy of the Expon Administration Regulations drafted to implement PL 102- 
484, section 1603 (the National Defense Authonzation Act of 1992). 

3) A print-out of all licenses approved for Iran since the NDAA was signed into 
law by President Bush on Oct 23. 1992 to include, in addition to the standard licensing 
information you provide to Congress, a report for each case on the grounds for which 
approval was granted. 

4) A detailed listing of all "informed" notices sent out to U.S. exporters under EPCI 
regulations, warning them that the exports they are considenng may require a license 
because of proliferation concern. This listing should include the name of the expxDrler, the 
date of the notice, the name of the officer issuing the notice, the destination country, the 
end-user, and a descnption of the commodity under consideration. 

5) A report listing all notifications to Congress under Article 6(j) of the Export 
Administration Act of 1979 (as amended). The report should include the name of the 
exporter, the license number, the ECCN number, the value of the commodity, a 
descnption of the commodity, the destination countrv', the end-user, the application and 
approval dates, and the agencies to which the license was referred. 



122 



6) The Commerce Department fccommcndations to interagency working groups for 
the sale of Bocmg civilian airliners to Iran, and for the transfer of used Boeing civilian 
airliners by Kuwait to Syna. 

7) I would greatly appreciate knowing whether there have been any cases for Iran 
since the NDAA of 1992 where the Commerce Department has proposed, or made, a 
commoditv cla.ssification determination. If so, please submit a brief report on each case to 
include the name the exporter, the hisior\ of the case, and the agencies, if any, to which 
the prop<.iscd commodity classification determination was referred. 

It is my understanding that this information is readily accessible through the BXA 
automated licensing data base and can he transmitted to me rapidly. In the event that 
some maienal requires more time to compile, please consult with Kenneth Timmerman 
or Dr. Robert King of the Subcommittee staff at 226-7825. 

Cordially, 



/pKO^^^ 



Tom Lanlos, Chairman 

Subcommittee on International Secunty, International Organizations, and Human 



Rights 



cc: Chairman Lee Hamilton 

cc: Subcommittee Chairman Sam Gejdenson 




123 



OFFICE OF UNDgf? SECRETARY OF DEFENSE 
WASHINGTON DC 2030I-20OO 




The Honorable Tom Lames 

Chairman, Sutjcommittee on International Security, 

International Organizations & Human Rights 
B358 Rayburn House OHice BuilcJmg 
Washington, DC. 20515 

Dear Congressman Lantos: 

This IS in response to your letter ol Apni 19, 1993 regarding a request tor 
documents relating to certain export license cases 

Because of the volume of the documents, and substantial time required to 
coordinate release of ?ensitivo classified and proprietary infomiaiiun originated and 
controlled by other departments and agencies. I provided a bneting on 20 July 1993 to 
Mr. Kenneth Timmerman and other subcommittee and full committao staff members. 
It IS my nope that the discussion provided information responsive to issues of interest 
to you and perhaps may obviate the need to prov.de documents 

Mr Timmerman said that, as a follow-up to our discussion, it would be helpful 
to exDlam the commodity classification process which was involved in one of the 
cases. Section 50 of the Export Administration Regulations states; "In any case in 
which the Secretary of ICommerce) receives a wmt^n request asking for the proper 
Classification of a good or technology on the control list, the Secretary shall, within 10 
working days after receipt o( the request, i.nform the person making the request of the 
proper classification." underthis section, tMe Department of Commerce is not 
required to obtain the concurrence of or consult wuh the Department of Defense or 
any ofhpr departrngnt DoD has encouragea Co'iirnerce to refer commodity 
classification requests to DoD (or review On occasion Commerce has done so. but 
has not esiabiisned a standard refe'rai prcess 

Please let me know if you have any further questions. In this regard, Mr. 
Timmerman may contact Steve Rosen of my staff at (703)-693-7110. 

Sincerely. 



UIZM'.^ — 

Peter M. Sullivan 

Acting Deouty Under Secretary 

Trace Security Policy 



124 



Suppliers of Dual-Use Technology to Iran 

Compiled from public sources by the Subcommittee on International Security, 

International Organizations, and Human Rights 

Committee on Foreign Affairs 

Country Companies 

Argentina 5 

Austria 1 

Belgium 6 

Brazil I 

China 11 

Czechoslovakia 2 

France 15 

Germany 41 

Greece 1 

Hong Kong 1 

India 2 

Iran 6 

Ireland 2 

Italy 14 

Japan 6 

Mexico I 

Netherlands I 

North Korea I 

Norway 2 

Pakistan 3 

Philippines 1 

Poland 1 

Russia 4 

Singapore 1 

South Korea 2 

Spain 9 

Sweden 4 

Switzerland 1 7 

Syria 1 

Thailand 1 

UK 15 

USA 52 

Total: 230 



I 



125 



Country 

Austria 

Belgium 

Chile 

Czechoslovakia 

Denmark 

France 

Germany 

Germany (East) 

Hungary 

Italy 

Japan 

Libya 

Liechtenstein 

Malaysia 

Malta 

Netherlands 

Russia 

Seychelles 

Spain 

Sweden 

Switzerland 

Thailand 

UK 

UK, Germany 

USA 

Yugoslavia 



Companies 
1 
3 
1 
2 
1 
7 
59 
1 
1 
2 
3 
4 
I 
2 
1 
2 
1 
2 
1 
3 
5 
1 
6 
1 
1 
1 
Total: 113 



nc-AOC n - QA - K 



126 



Country 



Companies 



China 

France 

Germany 

India 

Netherlands 

North Korea 

Sweden 

Switzerland 

Syria 

UK 

USA 



Total: 



2 

10 

15 

I 

I 

2 

1 

1 

2 

7 

11 

53 



Country 



Companies 



CIS 

Czechoslovakia 

Germany 

Japan 

North Korea 

Russia 

UN 

USSR 



Total: 



1 
1 
3 
7 
1 
1 
1 
5 
20 



127 



Suppliers of Dual-Use Technology to Rogue Regimes 

Compiled from public sources by tbe S u tx ajuuimm. on ImrniMtnnal Sacuruy, 

liuemauonal Organizauons. and Human Rights 

Commiuee on Fomgn AfTairs 

Key: CW= Chemical wiaponi. MT= MItsllc IcckDologlei. WM= Wcapo» maaufacturlni equipment 



Compant Counlrv 

CNKA (Comlslon Argentina 

Nacinnal de Knergia 
Atomical 



ENACF (Kmpresa Ajgcntina 

Nuclear \rcenlina de 
Centrales KleclrlcasI 



IN\ AK 



INVAP 



A/gcnCina 



Argentina 



Vnesi-Alpine Austria 

Astra Iliildlng< Delgium 

Xteicii Delgium 

Rel£fin ucU-alre Delgium 

Crn«v I. ink Belgium 

Hack! Belgium 



ReclDleni/ 

Calegnrv DeicrlptloB/Snurre 
Iran Contracted to supply 1 15.8 kg of uranium enncbed to 20% for use in an 

ArgentuK-buUt core for the Tehran reaearcb reactor, offered to tell a research reactor u 
Nuclear 1^87 and served as a consultant to Iran tn renegotiating the eurodif debt with France. 
Nuclear F Ml 7/24/89: Nucleoiucs Week. 1/22/87 



Iran 
Nuclear 

iron 

Nuclear 
Iran 

Nuclear 



Jose Balaiseiro 


Areentina 


Iran 


Nuclear Institute 




Nuclear 


Sauer 


Ausina 


Libya 



c-w 

Iran 
WM 

Iran 

/\rms 
Iran 

t.ib\a 
Nuclear 

I. Una 

lil'\n 



Worbng under contract to KWU to complete conttructiofl of the Busheir nuclear power 
reactors. 

Veronique Mauna. "L'Irait riaffinru ses ambilions. " Le Monde. October IS. 1987: 
Richard Kessler. Nucleonics Week. 12/11/86 

A governmental company associated with KWU of Germany to equip and maintain the 
Busheir nuclear power sLauon. 

Courner Iruerru2tu>nal. December 19. 1991 

Signed an S18 million nuclear cooperauon contract with Iran, suspended by the 
Argenune government on 26 Jan 1992. (INVAP = the Argentine National Insuiule for 
Applied Research, and is pan of the CNEAi; offered to supply a replacement core usmg 
20^ enncbed uranium for the University of Tehran reactor. 

Le Monde 6/29/92. Nuclear Engimertng Iniemaiional. 2/89: S2-54 

Trained Iranian nuclear techniciafu. by terms of a 1987 contract by which Argentina 
supplied 20* enncbed fuel for the Tehran research reactor. 
Leonard Spector. Nuclear .Ambitions, p 207. 

Provided bluepnnts and engineenng for constnicuon of tunnels for the Tarhuna CW 
plant ostensibly intended for the Great Man-made river project. Companies denies 
proliferation intent. 

Frantfuner Allfemeine March 16. 1993 

Complete assembly plant for local manufacture of long-range CH-4S howitzers Peter 
Linteweger. former chairman of a subsidiary. Noricum. was jailed on related charges in 
September 1987 
Medne^s 12/10/87 

Through British subsidiary. BMARC. supplied medium calibre munitions, weapons, 
and tooling to Iran via Singapore in mid-1980s. 

Independent on Sundav. 22 Nov 1992 

Intermediary for Iranian purchases of sodium cyanide from Rotexcbemie in Germany. 
Iranian owned 

Sledne^s S/ 1 8/91: 8/3/92. 

Supplied l.ibyas first 30 MW nuclear research reactor m 1972. .Negotiations lor a 
SIOO million nuclear consultancy contract with Libya were blocked in 1986 by the 
I! S 

Nuclear Engineering international Apr 1986. 
l-reight forwarders for equipment shipped to the Rabia plant. 

Stem Jan 12. 1989 
Cooling tower for Rahta plant. 

.VIT Jiin 16. 1989 



128 



CinnmoT 

Ion Beam 
Appllcillons 



Le« KorgM d« 
Zccbruftiic/Hcrital 



Mcchlmt 



Cguairr 


r.lepnr< 


□ CiCl^^R 


Irm 




Nuclew 


Belgium 


Iran 




WM 


Beleium 


Iran 



WM 



Sold * cyckriiBG lo IruL iccording lo ■ 1991 coolracL Delivery wu tpparenily 
licensed by Belgian govenuncnl 

Reultn 2/2S/92 
Buili • factory to minuricture air-launcbed rockets in the inid-1980i. 

Mednrwi 8/I/8S: 'Weapons of Mats Desirvciion. " Simon Wiesenihat Cenitr, 

Autusi 1992. 
Teamed with Knjpp Koppen of Germany lo build a SI. 4 bilUon copper complet in 
Sarctaeshmeta (Iran needi large quanuuei of prooested copper and brass for the 
production of artillery shells). 



SOBEN 



Belgium 



Nallonal Nuclear Brazil 

Energy Commission 

(CNEM 

iDdustrlas Cardoen Chile 



CEIEC-MacvIn 
Technology Ltd 



China 



China 



China NanchinR 
.\lrcrafl 
Manufacturing 
Com pan y 

China National China 

Electronics Import 
and Kxport Company 
(CK.IEC) 

China Nuclear China 

Energy Industry 
Corporation 
(CNEIC) 



China I'reciiion 
Machinery 
lmpi>rt-Kxpi»rt 
Corporation 



China Precision 
Machinery 
Import-Kxporl 
Corporation 



China 



Iran 

Nuclear 
Iran 

Nuclear 
Ubva 



Iran 

WM 
Iran 

MT 

Iran 

WM 

Iran 

Nuclear 



Iran 



MEED 24 March 1989 
Part-owner of Eurodif consortium 
Tribune de VExpaiuion. 10/28^1 

Negouaiing in 1991 to sell SISO million worth of West German nuclear equipment 
obtained as a result of a 197S Brazil-West Germany nuclear protocol. CNEN was in 
charge of Brazil's clandestine uranium enrichment program. 

Financial Times 12/3/91; Leonard Speclor. The Undeclared Bomb, p 258 

Reports from Chile allege that arms-maker Carlos Cardoen. under mdictemeni ui the 
United Stales for his dealings with Iraq, is negoiiaung to sell fuel-air explosives to 
Libya 

Saniiafo Domestic Service 10/15/90 (FBIS NES 10/25/90) 

Joint venture with CEIEC. which has been supplying radars and manufacuinng 
equipment lo Iran s Armed Forces. 

Mednevvs 25 Nov 1991 
Manufacturer of the Silkworm HY-2 missiles supplied during the Iran-Iraq war 

Jane s Soviet Intelligence Review. May 1989. 



Supplied radars and manufacturing equipment for defense electronics plant. 
Mednew, 25 Nov 1991 



Began constructing a 30 MW research reactor at the Isfahan nuclear center in 1990. h 
terms of a Jan 1990 contract, that was photographed by US. satellites in Sept W*)] 
and idenufied as part of Irans atomic weapons program. CNEIC is also supplying 
nuclear technicians and low-ennched uranium, as the export arm of Chinas Mihi^lxn 
of Energy Resources. In Feb. 1993. CNEIC signed an agreement with the Atomic 
Energy Organization of Iran to build two 300 MW Qinshan nuclear power reactors 
Washington Times. Oct 16. 1991: MEED March 5. 199} 

Manufactured C-801 anti-sbip missiles which US intelbcence reports, quoted in ir.i 
NY Tunes, said were debvered to Iran in 1987; also supplied Silkworm anti-ship 

WM Ml missiles and associated manufacturing technology; delivered 90 CSS 8 aniiship 
missiles m June 1992. Banned from business in the U.S. from June 19'>l through 
March 1992. because of its role in missile sales to Syna and Pakistan 

NY Times. 10/28/87: Defense & Foreign Affairs WeeUv. July 814. !VS5: 
Newsweek. 6/22/92. 

Syria Main contractor for sale of M-9 missiles and production equpment Deliveries in Jun. 

1991 tracked by Israeb and US warships 

WM Mr Washington Times 7/2/91: Xinhua iBeijing) 7/15/91 



129 



Compinr CoUBlrT ClItfQrV Oncrlpllon 

Ckhn /honKyuan China Jrai Maui hmldiof contractor used by China for foreign nuclear dealt. Will ovenec 

l-'oreliin building of (be reaciort purchaicd from China lo 1993 Work in Undem wiih Itae 

KnglnerVcrlnK Naetca Ckwa Maiwaal NaciMr Ovp 

Company BripnK Xmhua 4/23/9} 

Chlna-Hewletl China Iran Joint veniure with CEIEC. which hat been supplying radars and manufaclunng 

Packard equipment lo Iran s Armed Forcet. 

'*''^ Mrdnrwi 25 Nov 1991 

Greal Wall Industry China Iran Believed to have contnbuled to sale of M-9 and Mil missiles and manufacDinng 

Corp technology Banned from business in the US from June 1991 through March 1992. 

MT because of its role in missile sales to Syna and Pakistan. 

M liiihad. 9/20/89: Mtdnews 6/8/92: BermudeL "Ballitiic Missile Deveiopmems 
in Iran.' Monterey Insuime. 1993. 

Poly Technologies China Iran Believed to have contributed to sale of M-9 and Ml 1 missiles and manufactunng 

technology, sold tanks and armored vehicles 
'^ Mednrws Sepi IS. 1991. 

Poly Technologies China Syria BeUeved to have orchestrated sale of M-9 missiles and manufacturing technology 

Mednews Sept 15. 1991 
VfT 

Qlnshan Nuclear China Iran Mam contractor for the Qinshan 300 MW nuclear power reactors sold to Iran in June 

Power Co 1993 

Nuclear Reuters. July 30. 1992: UPI 2/23/93: IRNA 7/6/93 

Shanghai Nuclear China Iran Designer of the Qinsban 300 MW nuclear power reactors sold to Iran in June 1993. 

F.neineerlnR Reuters. Julv 30. 1992: UPI 2/23/93: IRNA 7/6/93 

Research and Design Nuclear 

Institute 

A Framework Accord was signed in 1986 for Soviet supply of a Pressurized Water 
reactor plani The reactor vessels were to be supplied by Alomenergoexpon. 

Nucleonics Week. 2/27/86 

Signed a 22 May 1989 cooperaiion agreement with North Korea that involved trainini: 
North Korean technicians in nuclear safety techniques Other exchanges of nuclear 
informaiion look place under the aegis of the Moscow-based Interaiomenergo Socieiv 
and the Nuclear Research Institute m Dubno. also m the USSR. 

Profue CTK in English 6/29/93 IJPRS Pmliferaiion Issues 7/7/92) 

Omnipol Czcchosk'»i» f.l^vn Supplied large quantities of HMX explosive, which is used as a primary explosive for 

ij nuclear weapon cores Signed a new contract in April 1991 to modernize the T/\Z tanit 

Nuclear and armored vehicle repair factory 
Medneus 4/27/92 

Synihexia Semiln C/cchoslov at. I.ih\a Manufacturer of HMX explosive, which supplied by Omnipol lo Libya. Iraq, and Iran 

la for nuclear warhead producuon. 

Nuclear Mednews 4/27/92 

SynlheslM Semiin f/echONl^i. 3k /run Manulacturer of HMX explosive, which supplied by Omnipol lo Iran for nuckar 

ij warhead production. 
Nuclear .^edneus 4/27/92 

Techniirxpiirl (rechml.-. jk Intn Supplied HMX explosive to Iran, which is used m nuclear explosive devices 

'■* "Wetipons of Mass Destruction. " Simon Wiesenthai Center. August 1992. 

Nuclear 

DIS\ Denmark Lth\a Toundrv equipment for CW bomb production line at Rabia. 

Washington times, Jan 16. 1989 



Xtomenergo export 


("IS \onh 




Korea 




Nuclear 


Nuclear Research 


C'/echoslov an North 


Institute 


la Korea 




Nuclear 



130 



rnmlunY 
Air U^oMe 



AlcaKl Espac* 



Counirv 
Fruc* 



France 



Cmttrort ntirrlplloB 



Centre Nalionale de France 

Recberchc 

Sclentiriquc (CNRS) 



Cogema 



France 



Commissariat de France 

rF-nergie Atomic 

(CKA) 



De Uielrich 



Decibel France 



I'rancc 



I rancc 



Iran 

Mr 

Inn 

WM 

Syria 

cw 



CEPAT (Compafcnie 


France 


Iran 


Europcene Piece 






Automobile Tracleur 




MT 


Societc. aka 






CGE Aisthom 


France 


Libya 
Nuclear 



Iran 

Nuclear 
Iran 

Nuclear 



CommUi^ariat de 


I ranee 


Uh\a 


I'Knergie Atomic 






(CFA» 




Nuclear 


Compaenle (Unerule 


Trance 


Ubva 


Maritime 




Nuclear 


Coredlf 


Trance 


Iran 
Nuclear 


Creusol'l.olre 


Trance 


Svno 



iibvn 

S\ria 
Nucloar 



Several air teparauon plants al major pelrocbemicals compleiei lAralc Mobarakeh). 
to produce oiygen and nitrogen. While ttaii it a standard procedure at lucb planu. Iran 
w«U and * lacfe indigenous supply of niln>|en as fuel for lU various musile projecu 
MEED * May 1990. 10 Nov 1989 

Conlracied to sell a network of satellite ground stations in 1990. worth 120 million 
Ffrs. 

Arables Oct 1990. 

Helped esublish Syria's Scientific Research Council (CERSI in 1969. and to expand 
Its objeciivies in 1972 and 1983 lo encompass a wide range of mibtary technologies, 
including signal pioccssing (radar, telemetry), chemical and bacienological 
'pollutanu.' anificial inlcUigence. and precision mechanics; supervised the (raining 
of Synan engineers in France. CNRS is the leading government-run scienuTic 
research insutution in FraiKe and is involved in everything from nuclear energy, 
theoretical malhetmaucs. to sociological studies. 

"Weapons of Mass Destruction,'' Simon Wiesenshai Center. August 1992. 

Served as front for the shipment lo Iran from California by Reza Zandian of two IBM 
ES-9000 supercomputers in Jan. 1993; named in OEE indictment 
OEE affadavii. 1/93. 

Supplied 10.000 lun of electric cabling, a miniature power plant and a numencal 
process control system for a nuclear research reactor in the early 1980s, as part of 
Project Hamid 

"Weapons of Mass Destruction." Simon Wiesenihai Center. August 1992. 
Part-owner of Eurodif; jointly owns Sofldif with Iranian Atomic Energy Organizauon 

Tribune de I'Expansion. 10/28/91 

Borrowed SI billion from Iran in 1974 Us build an uranium ennchmeni plant in Iran j 
pan of payback of the loan, was negouating in 1991 lo supply Iran with enncbed 
uranium 
IHT 7/5/91 

Alleged agreement lo provide Libya with a small research reactor and I2.S kg of HEl' 
in 1981. as pan of Project Hamid. No equpmeni acoially shipped. 

Weapons of Mass Destruction." Simon Wiesenihai Center. August 1992 

Main shipping agent for containers of nuclear-related electronic equipment sold lo 
Libya as part of Project Hamid. 

"Weapons of Mass Destruction." Simon Wiesenihai Center. August 1992 

21^^ share owned by Iranian Atonuc Energy Organizauon; pan of Eurodif uranium 
ennchment consonium. 

The Uranium Institute iLondon) 

Built the Horns ammonia and urea plant in the late 1970s While this is a leciiimjie 
civilian faciliiy. both its equipment and the industnal processes can he used m 
chemical weapons production. 

"Weapons of Mass Destruction." Simon Wiesenihai Center August IW2 
Supplied glass-luied cauldrons for the Rabta plant 

.VK limes Jan 16. 1989 

Electrical equipment sold to buyers from the Scientific Research Council (CCRSi in 
.April 1992 CERS is a known procurement agency for Syrian unconveniional %K:jpi 
programs 

MednetiS 5/18/92: "Weapons of Mass Destruction.' Simon Wiesenihai Center 

.\ugust 1992. 



131 



Couniry 



Company 
Eurodir 



lotcrtechDique t'rance 



Luchalrc 



Navral SARL 



Sagem 



SOCK A 



France 



France 



Rhone Poulenc France 



Rousscl-Uclar France 



Saderbank Paris France 



France 



France 



Soclete Kran<;aUe de 1 ranee 
NeRoce (SKN) 



Calegorv 

Huckar 

Libya 

Anns 
Iran 

Aims 



Iran 

CW 

S\ria 

CW 
Syria 

CW 

Iran 

Financial 

S\r^a 

WM 

Iran 

Nuclear 

Iran 
CW 



Soclete Nallonale 


France 


S\rta 


des P(>udre\ el 






KxploMfs iSNPKl 




W>4 


Socicle Natlonale 


i ^Jncc 


Iran 


dc« Poudre^ et 






Kiplosifs (SNFK) 




NfT 


Sofldir 


l rancc 


Iran 
Nuclear 


Souriuu 


1 rancc 


S\rta 



NiKlcor 



DricrlplloB 

Uaa piMrfcmrl « 10 pciceoi (bare of tbit European contomum for uranium cnnchmcni 
in 1974. wbicb i( bai rclained despite payback by France of (he astocialsd $1 biUion 
taw Mrf 4<«a «• «|K FuTt *— — £aM|y Afcocy. 

Tnbtute de lExpaiuion. 10/28^1 
Pareni company of INTEC. 

S(»r>i Jan 12. 1989 

Suppbed air-to-ground rocket pod< for tbe 'Paratsu,* a military ultra-ligbt vehicle 
(Ul>1i designed by tbe FrciKb and debvered to the Revolutionary Guard starling in 
1986 These ULMs. subse<^ucntly manufactured in Iran, were less sophisticated than 
those Iran sought to purchase from Stemme ui Germany in 1993 and »ere ideal for 
terrorist or anti-shipping musions. 

Medvws 8/I/S8 

Conspued wiili Charles Caplan, indicted in tbe U.S.. to ship Sarin-rUled bombs to 
Iran in 1989 

US Court documenu 
Major supplier to Syrian state -control led pharmaceuticals factories. 

"Weapons of Mass Destruction.' Simon Wiesenthal Center. August 1992: 
Mednews 8/17/92. 

Major supplier to Syrian state-controlled pharmaceuticals factories 

"Weapons of Mass Destruction." Simon Wieseruhai Center. August 1992: 
Mednews 8/17/92. 

Financed sale of IBM supercomputer to Iran in 1992 and 1993 by Reu Zandian and bis 
Iran Business Machines 
OEEaffadaxu. l/9i: 

Signed an agreement in 1983 to help buUd a tank upgrade plant in Svna. to retrofit 
Synan T-72s with French and NATO electronics. 

"Wrapons of Mass Destruction." Simon Wiesenthal Center. August 1992: 
Mednrxs 8/17/92 

Subcontracmr to Framatome. to make high-pressure boilers for nuclear plants. 
Engineers from Socca accompanied the Framatome delegation to Busbeir m Feb 1987 
(o perlurm a feasibility study for complete these power reactors. 

"Weapons of Mass Destruction." Simon Wiesenihai Center. August 1992 
Conspired wiili Charles Caplan to ship Sann-nUed bombs to Iran in 1989 

US. Court documents 

Contracted with CERS to build a 280 million franc tank munitions plant in 1986 
(final status unknown). 

"Weapons of Mass Destruction." Simon Wieseruhai Center. .August 1992: 
Mednew! 8/17/92 

Supplied process and equipment for piopellant powders; shipped hundreds of tons cf 
IIMX and plastic explosives in the mid-1980s for the production ol naval mines 
.Mednews 8/1/88: LEvenement du Jeudi. 23 July 1987 

Retauis a 25*^ share in the Eurodif consortium. iCyJt of SoAdif ownej by the Iranun 
Atomic F.nergy Organization. 

Tribune de I'Expansion. 10/28/91 

Electrical equipment sold to buyers from the Scientinc Research Council (CERSl in 
.April 1992 CERS is a known procurement agency for S\Tian unconventional viea^.- 
programs 

Medne\ts S/IH/92 8/17/92: Weapons of Mass Destruction S.mon Wieseninal 
Center .\ugust 1992 



132 



Compinv rnuntrt Ctttran DtltrlBtllia 

S4. Gobala I r»nc« Syria M»jor supplier lo Syriio lUle-conOolled pbanniccuuctit fictonei. 

'Weapons of Mail Detlruciton. ' Simon Wietemhal Cenler. August 1992. 

Tccbnislomt France Libya AUegedly igreed lo provide Libyt wiih » taull re»e«reh reaclor »nd 12J kg of HEU in 

1981. as part of Projecl Hamid. 
Nuclear "Weapons of Mass Deslniclion." Simon Wiesemhal Center. August 1992. 

Tccbnlp France Iran Has conlracied lo buUd elbylcne and other chemical proccsting planu ai the Tabni 

and Ank petrochemicals compleies. along with its Italian partner. Technipetrole 
CW (TPL). While these are legitimate civilian projecu. ethylene has multiple military 

uses, including as a mustard gas precursor and fuel-air explosives. 
Ulire du Golfe. 8 March 1991: Us Echoes S/3/91: MEED l/IS/93. 

Ttchnip France S\ria Took over the Homs ammonia and urea plant in the early 1980. which it is currently 

eipanding with the aisisiaiKc of MW Kellogg of Britain. While this is a legitimate 
CW civiban facility, both its equipment and the industrial processes can be used in 

chemical weapons production. 

"Weapons of Mass Destruction.' Simon Wiesenthal Cenler. August 1992 

Thomson-CSF France Lib\a Aaempted to sell 20 calulrons for enriching uranium ui the mid-1970$ (deal blocked 

by French government), supplied large quantities of nuclear equipment to Libyan 
Nuclear intennedianes in 1981 as part of Project Hamid. 

•TTi* Islamic Bomb: Intelligence Newsletter. March 1. 1989: Liberation. 2 June 
1986 
Abacus Cicrmanv Libya Front company rtin by Hans Joachim Rose that tned to purchase a Siemens 

process-line control system for the Sebba CW factory. 
Granada TV 'Wortil In Action. " Apr 2. 1991. 

AEG Germanv Syria Electrical equipment sold to buyers from the Scientific Research Council (CERSl in 

Apnl 1992. CERS is a known procurement agency for Synan unconventional weapon^ 
programs 

"Weapons of Mass Destruction," Simon Wiesenthal Cenler. August 1992 
AEG <"icrman\ Lifcva Supplied producuon equipment to the Otrag missile group in the early 1980s 

"Weapons of Mass Destruction." Simon Wiesenthal Center. August 1992. OnginaJ 
source: Forum: Zeitschrift fur tratisnalionaie Politik. Aoril 1979 Ml/2. Roland 

\lcatcl SEI. (icrmaiiv Iran Insulling. along with Siemens, up to 500,000 telephone lines per year as of 1992. 

based on ITT System 12 switch Will also install fiber optics networks and Very Smaii 
WM Aperture Terminals for saiellite links in distant regions; in final stage of negotiation^ 

to sell two Zohreh" telecommunications satellites worth $350 nullion. 
French Embassy note. 12/1/92: Space News. 5/25/92 
.Mfred Teves GmH Cictmjin iibsa Industrial coohng equipment for the RabtaCW plant 

WSJ Jan 18. 1989 

Audi Cicrmans Svrin Negotiations under way lo help build a large pharmaceuticals plant near Damascus 

Tender documents {French Embassy weetly economic review. 2 Oct 1991 j 

BASK licrmjiu Iran Teamed with Bayer of West Germany to build IheQazvin pesucides plant, licenses ikoi. 

pulled by German Federal government m 1991 Part of the former BillenelJ VEB 
C"W iChemikombinaii in the GDR 

Vrij Nedtrtand 17 march 1990 IFBIS WEU 22 Ma\l. reply to questions b\ the 
'German Bundestag. 6^2 
Baver (i».Tman\ S\rtn Based in Esslingen. this company contracted to supply unideniified equipment id 

CERS in May 1992 
^"M Weapons of Mass Destruction." Simon Wiesenthal Center. .\u^usi 1992: 

Medne»s 8/17/92. 





CW 


r.ermanv 


S\na 




Nuclear 


(icrmanv 


Lihsa 




MT 


(icrmanv 


Iran 



( tcrmjiu 


Lib\a 




CW 


(icrmans 


S\ria 




CW 


I icrmanv 


Iran 



133 



f nfnpjnv 



Becker Kabfl und 


GeniiAny 


Libya 


Lampcr 




Aims 


BIschorr 


Germany 


Libva 


Blllerfeld 


Germany 


Iran 


Chemlekomblnal 




CW 


Bolcnz & Schafer 


Ciermany 


Libva 



Bosch 



Braun AG 



iurklln 



Carl Schenck German\ 



China L'nilfd (iirmanv 

Trading Corp (ImbH 

Coherent (;mbH (;i;rnijn\ 



Country Cmltvarv DeacriptloB 

(jcaaany Inm Major etjuipmeni supplier for the Qazvin peiticidea plant: built the aluminium 

bo<tluig ('environmental packaging') plant and the petucides formulauon plant in 
OV 1M7-AS A^Aatiatktt (owwcuoo by German prosecuton on Nov 14. 1989. 

Vnj NtdtHatd 17 march 1990 IFBIS WEU 22 May). 
Surveillance cameras. 
Stem lax 19. 1989 

Tools and machinery for the Rabu CW plant. 
Stem Jan 12. 1989 

Aka ChemKkombinat Biturfeld (« DDR): subcontractor to Lurgi for peaticides plant 
Der Spiegel 2/14/92 

Manufactured Tiber rolling machines shipped by Fritz Werner in 1991 via Rotterdam to 
Libya i ballisuc missile program (Central Repair Workshop): under investigation by 
MT German Cusmms 

German Customj Documents 
Supplied electncal equipment for the Rabta plant 
London Sunday Ttmts. 5 Apr 1992. 

This Frankfurt-based subsidiary of Gillette supplied aerospace technology to Otrag in 
the late 1970s, which was transferred to Libya's ballistic missile projects. 

Geerd Greune. Bundesdeuische Rakelen m Zeraralitfrika' 
Supplied test equipment for the Otrag missile program. 

Stem Jan I. 1987 

High-iempcratiire furnaces licensed to the Syrian Scientific Research Council (aka 
CHRS) m 1990 and 1991. 

German Bundestag documents 

Supplied a balaiKing machine, with potential use in uranium enrichment centrifuges, 
to Shanf LIntversity. which has been identified with the nuclear program and is 
Nuclear conlrolled by the RevoluUonary Guards. 
BBC Panorama. March 6. 1993 

Iran Based in Frankfurt joint venture with CEIEC of China, which is supplying radars and 

manufacturing equipment to Iran. 
^■M Mednews 11/25/91 

Iran Commerce alleges the German subsidiary of Coherent Inc of California committed 5 

export control violations between April and Dec 1989. mcluding anii-lsrael boycou 
Wf violations and illicit sales to Iran. 

Etpon Control Sews Oct 31. 1992 

Purchased 210 tons of thiodyglycol on behalf of Iran from Alcolac USA in 1987 and 
988 

V S Court documents 

Front company for financial transactions and technology transfer for the Otrag 
program, located in Karlsruhe. 
Siem Jan I. 1987 

Ordered large quanuues of ammonium perchloraie through Ginindus. an intermediarx 
based in Switzerland and the US. for Iran s ballistic missile programs. The AP was 
i^^p teized in I98H on bt>ard an Iranian freighter, the Aladat. bound for Dandar Abbas. 

IKT March 29. 1989 



Germany 


Libya 




WM 


(lermanv 


Libya 




MT 


Gcrmaiiv 


Libya 




wr 


(iermanv 


Syria 




MT 


Germanv 


Iran 



Colimex <;mhH & < 


llcrmjnv 


Iran 


Company K(i 




CW 


ConiruNt 


I tcrmjtu 


l.,h\o 


\ ermunen^verwallun 






g'S-EtNellschafl 




Nfr 


OA Dampr 


(icrm3n\ 


Intn 



134 



Cbbbiby 

D«n i m « AG 



CBHBlrr 
Gcmuoy 



Deutsche Bank Germany 



Dornler 



Germanv 



Drebs und Klefer Germany 



Ferroslaal 



Germany 



FFA F'lu(>ieuE'»erke Germany 
A 1 1 e n r h e i n 



Frllz Werner (imhH Cicrmanv 



Funk und (icrmans 

Navigiillon^lecknik 



raleporv 

Nonh 
Korea 



Libya 

CW 
Libya 

MT 

Lib\a 







CW 


E. Merck 


Germany 


Libya 
CW 


Ferroslaal 


Germany 


Libya 



MT 

Syria 

MT 

Iran 







Arms 


ForderuRR 


(iermany 


Libya 
NfT 


Frederick Deckel 


Citirmany 


Syria 
Nuclear 


Frederick Deckel 


(itrrmjnv 


Iran 
Arms 


Frllz Werner CmbH 


( "1010^0% 


Libya 



MT 

Iran 
Nuclear. 

Lihva 
MT 



Dcacrlpllon 

Prom Sep( IS. 1986 itirougb OcL IS. 1987. Dcguua illegally re-««pofied ziicoaium 
purcbaud from (be U.S. to Nortb Korea, wben it wai probably used for punty tesung 
Tkc rnapny sua Harnt UOUOOO. 



Jo* Btrmudti, North Korta's Nuclear Programme," Jane'i Intelligtnce Review. 
9/91. 

Financing for Rabla plant 

NY Times 1/I/S9 

Supplied production equipment to the Oing group in tbe early 1980s, some of it 
through tbe German-Libyan front company. Mela Tronik. 

"Weapons of Mass Destruclion. ' Simon Wieseiuhal Center. August 1992. Original 
source: Karl Gunlher Bank. "Deutsche Raketen fur Gadhafi ". Stem. Dec 2i. 1986 
Stress engineenng for Rabta plant. 
Stem Jan 12. 1989 

Piccusor cbemicals for Rabta planL 
NY Times 1/1/89 

Parent company of Fritz Werner, wbicb supplied machine-tools and manufacturing 
equipment for Libya's Al Fatah missile. 

Der Spiegel Sept. 6. 1991 

High-temperature furnaces licensed to the Syrian Scientific Research Council (aka 
CERS) ui 1990 and 1991. 

Mednews 9/28/92: "Weapons of Mass Destruction." Simon Wiesenihal Center 
Auiust 1992. 

Attempted to procure military trainer aircraft in tbe United Stales in 1988. for sale u< 
the Revoluuonary Guards, but applications were denied by the DoC. 

Mednews 6/8/92 

This lesearcb csublishmenL based in Bonn, carried out numerous projects on behail' 
of Oirag. ostensibly as part of the early phase of the Arabsat program 

Geerd Greune. Bundesdeuische Raketen in Zenlralitfrika " 

Parent company of Deckel France. 

Mednews 5/18/92: "Weapons of Mass Destruction. " Simon Wiesenihal Center 
.August 1992. 

Sold numerous CNC machine-tools to armaments faclones run by the Defense 
Industries Organization m the imd and late 19803. 
DIO brochures: Mednews March I. 1993 

Supplied machine-tools and manufacturing equipment for Libyas Al Fauih missile 
project, some of which was seized on board a Libyan freighter by Gcnnan Customs 
agents in Hamburg in July 1991. 

Der Spiegel Sept. 6. 1991 

Performed maintenance, consmiclion. and technical conditioning work on the BusncL- 
rcactors in (he mid-1980s: shipped equipment 10 conventional arms lactones in l'>Sr- 
delivered a lumkey ammuniuon plant in June 1989: major supplier of propellant :inj 
explosives technology and automa(ed prcKess lines. 

"Iran's Nuclear Effort." Julv 18. 1991 paper by Yossef Bodanskv. of the Task Fort-t 
on Terrorism and Unconveruioruil Warfare for the House Republic Research 

Located in Augsburg, delivered measurement instruments and gyros designed for the 
Nike Hercules program (o Libya's Otrag missil project, on Aug 26. 19KS. 
Siem Dec 23. 1986 



135 



Campiar 




Counlrt 


Ciugflfr 


CcKllscta«ri rur 




Oennanv 


Ubva 


Aulomillon 






CW 


Globcsal 




Germany 


Ltbva 


S«t«llllcn-icchn 


ik 






GmbH 






KTT 


H. Wohlcnberi: 


KG 


Gcrmanv 


Iran 


GmbH 









HcberKcr Bau 



Hela 

Troolkelektronlsche 

Entwlcklungs-und 

VcrtrlebseeselUchaf 



WM 



Germanv 


Ltbva 




CW 


("icrmajiv 


Libya 



MT 



Htlasysltm 


(iermanv 


l.ibva 
MT 


Hoch-Tlef und 


GermanN 


Lib\a 


Ingcnieurbau (tmbH 




MT 


Hunnebtck 


Gerinan\ 


Libya 
CW 


Imhausen Chemte 


(iermanv 


Ltbya 
CW 


IndusCrlal 


(iermanv 


Iran 


Kleclronlcs Gmhh 




WM 


INTKC Technical 


Germanv 


Libya 


Reading Logisllk 




Anns 


Intus <ie%el\charf fiir 


(iermanv 


Libya 


informallonslechnis 






Che 




Mr 


L'berlraBunE>y\lenic 






J. Sarlonus 


(iermanv 


Libya 

c-w 


Joseph \|ulbBuer 


(iermanv 


Libya 


Machine 




WM 


Junker 


(iermanv 


Libya 



WM 



Compuura Tor Rabu plant. 
Stem Jan 12. 1989 

Atsociaied wiib Otrag in Libya, company run at o^ 1983 by a fonner Otrag execiMivc. 
Walter /.lelger. who was in charge of Olrag tetu. 

Gterd Greune, "Bundetd^utKhe Raketen in Ztntralt^rikn " 

Supplied machine-iools in 1988-1989 wiib Siemens controllen for an entire artillery 
factory in Iran Although ordered by Iran t Defente Industries Organizauon in 
Dusscldorf. Wohlenberg claims (he orders were intended to machine 'higb-preisure 
pipes of caliber 105. 130. aod 155." 

Orr Spiegtl I Junt 1992 
Consmicuon work for Rabia plant. 
TV rimer I London) Jan 7. 1989 

Munich defense electronics company, set up in 1977 by a former Siemens engineer. 
lleUnui Lang, supplied electronics gear for the Otrag missile program. 
SrerTi Jan I. 1987 

Owned by Helmut Lang and Austrian citizen. Herwig Kunze; esublisbed to purchase 
high-tech arid to oversee test program for tbe Libyan Otrag missile program. 

Sitm Jan L 1987 
Contributed to the Otrag missile project in the early 1980s. 

Siem Jan I. 1987 

Buikluig matenals for Rabta plant. 
Stem Jan 12. 1989 

Main contractor of Rabta plant: company officials indicted and jailed in Germany in 
ihe Tirsi ever prosecution related to Germany's export control laws. 
NY Times 1/1/89 

Attempted to procure in 1991 a US built satellite down-link station on behalf of an 
identiAed agency of the Ministry of Defense in Iran. 
Sttdnews 6/8/92 

Atr-to-air refueling probes for Libyan Mirages. Bought out by Inieitechnique of 
France 

Stem Jan 12. 1989 

Located in Pfaffenhofen. supplied telemetry equipment lo Helmut Lang lor the 
Itiissalai (Otragi program, built to U.S. specincations 
Stem Dec 23. 1986 

Construction materials for Rabta plant. 
Stem Jan 12. 1989 

Prevision (forecasting) technology. 
CBS\ iBonni Jan 23. 1989 

lierrmanv s former avcraft manufacturer, supplied higb-temperature furnaces for use in 
the Rabta plant. 

lx>ndim Sunday Times 5 .\pr 1992. 



136 



rnmnanv 

Karl Kolb C.mbH 



Karl Kolb CmbH 



KlockDcr 



Country 

Gcnnurf 



Germanv 



Genninv 



Krebs and Kcfler 



Krupp Koppers 



Germanv 



KV.V 



KWl' 



I.elfeld AC. 



CaUgflfr Dticrlnllon 
Mm SiMfwcted by U.S. gowniocai of bavuig provided Icchnolo^y and producuon 

equipmeni in 1991 for Iranian CW programt. The US. Exnbauy in Bonn demarcbed 
CW ibe German gum i mium on K«tb'« a r iii i i i iai u iao iH c«rly 1992. Kolb's astisuuicc 

wai coniidcred etienual lo Irant CW progranu by US ofriciali. 
Mednews 7/6/92. 



5vria 



CW 



Iran 



CW 



Kont 


Germany 


Ltb\a 
CW 


Korfmaon 


German\ 


Libya 



CW 

Libya 

CW 
Iran 



Suspected by US and German government of having provided technology and 
production equipment for dual-ute chemicals plants in Syria m the early to mid 1980s 

Mednrwi 7/6/92: "Weapons of Mass Desiniclion. ' Simon Wiestnihal Center. 

Amusi 1992. 
Contracted in 1991 to build i 17S.000 loit/year plant to manufacture polyvinyl 
chlonde at Bandar Kbomeuni. in cooperauon witb Krupp Koppers. with German 
government (Hermes) export credit guarantees. Wbile this is a legitimate civilian 
contract. PVC plants can be used wiiboul conversion to manufacture chemical weapons 
agents. 

BBC. Ima, July J 1991 
Overhead cranes for Rsbla plant. 

Wasltinfton Times. Jan 16. 1989 

Supplied special ventilating fans, worth DM 100.000 each, for the lunnel cutting 
machine built by Westfalia-Becorit. ostensibly for tbe Great Man-made nver projeci. 
which has been identiTied with Libya's third CW plant at Tarbuna 

Frankfurter Allgemeine March 16. 1993 

Civil engineering company which helped build steel foundry at Rabia CW and 
munitions plant. 

London Sunday Times. 5 Apr 1992. 



Contracud in 1991 to build a 17S.0O0 ton/year plant to manufacture polyvinyl 
chloride at Bandar Khomeimi. in cooperation with Kltickner While this is a 
CW. Arms legitimate civilian contract. PVC plants can be directly used without conversion to 
manufacture chemical weapons. The Iranian government owns 25. 1'^ of the Kiupp 
group, which IS also engaged in building a $1.4 billion copper complex at 
Sarcheshmeh. 



Iran 

Nuclear 

l.ib\a 

Nuclear 
S\ria 

CW 



I.eK KnRineerine 


(itfrmjnv 


\'onh 


GmbH 




Korea 

Nuclear 


Levbnid M', 


( tcrmanv 


l.ihva 



BBC. Into. July 3 1991. MEED 3/29/S9 

Coniracled lo build two 1300 NfW power reactors at Busbeir in 1974; coniiact 
cancelled by Revoluuonary govennnent in 1979 and slUl in ligitation K>M' has iriec 
to dehver equipment lo ibc site from the United Stales, but has been unable to obiam 
cKpon licenses 

Nucleonics Week / 7/9/89. 

Allegedly contracted to build a clandestine nuclear reacior in Libya m the laie 1<)70> 
intended for plutonium production. 

"Weapons of Mass Destruction." Simon Wiesenthal Center H/92 

Special mixing furnaces licensed for sale lo the Syrian Scientific Research council 
(akaCERS) in 1991 

Mednews 9/2S/92: "Weapons of Mass Destruction." Simon Wtesenihal Center 

Aueusi 1992 

Suspected of having sold a silicium alloyed steel, a special steel allov used tor 
containing radioactive materials. 
SY Times 11/10/91 

Source of vacuum smelting furnaces shipped as an internal German sale to W C 
lleraeus. intended for super-alloy work on Libyas Al Fatah musiic This sale, v^hiic 
legal, prompted the German aulhonties to pass a special ordnance u> block the e\rv 
ml 1/91. and lo strengthen export control legislation in3/92. (The suods uere iinj> 
seized in Rotterdam in 7^1), 

Nuclear Engineering intemaiionai. 2/92. pp 7-8 



137 



CBiaB«n» 


CflUBirv 


Ciicgory 


Leytold AG 




,Vort/i 
Korea 
Noctca 



Levbold AG 


(icrmanv 


Irtm 
Nuclear 


Lcybold-Hcracus 


Germanv 


Iran 
Nuclear 


Llcbherr 


Germany 


Iran 
MT 


LInde 


Germany 


Lib\a 


Lurgl MelallurEle 


Germany 


Iran 


GmbH 







l.ui Inleriech Germany 



Miielrus Oeuiz Germanv 



Maenetfabrlk Gcrmjnv 



MAN TechnoliiEJis (icrinarn 



ManncNmiinn i)emat> (icrman\ 



MBB 



MHH 



l.ibva 

MT 

Iran 

MT 

Iran 

Nuclear 
l.tb\a 





NfT 


(icrmanx 


Iran 




y^-M 


(icrmjnv 


Iran 




\fr 


(icr marts 


l-ih\a 



Deacrl^illnn 

Tbe BND is tnveiii{aiin( reports thai Leybold has supplied Nonb Korea with two 
electron beam fumacu. two 'laboratory furnaces.' and a 'small laboratory furnace. 
IW iicai lam ituama* Asy tev« bna ■'•■rr"' >o Nonb Korea throu^b Pakutan or 
India in the carlyb l9BOs. tbe laboratory furnace allegedly reacbed Nonb Korea via tbe 
former GDR in 1987 Tbe BND also suspecu tbat two Leybold AG technicians went to 
Nonb Korea in 1989 to wort on a nuclear facility, and a company ofricial returned 
there in 1990 

Nuclear Enfineehng imemalioiud. 2>92. pp 7-8; NucUonics Week. 11/28/91. p 1 
bv Mark Hibbi 

Supplied vacuum pumps to Tehran Univenity, of potential use to uraoium ennchnwnt 
centrifuges 

BBC Panorama, march 6. 199} 

UmdentiTied nuclear supplies to cUwdestinc banian research site controlled by tbe 
Revolutionary Guards, in tbe late 1980s (tbe company was tpUt in 1989). 
Der Spiegel 2/14/92 

Mam contractor on tbe Hepco plant in Arak to manufacture earth-moving machinery 
(Iraq used Liebherr trailors as Scud-launcbers]. 
MEED 9/2J/88 



Oxygen unit for Rabta plant. 
Washmffton Times. Jan 16. 



1989 



\n 



This subsidiary of Metallgesellschaft AG. signed a 44-montb contract in 1988 for 
engineenng consulting services, to build a major pesticides plant near Qazvin: 
contacts on this, and a pesticides 'formulation' planL began in 1984. 
The Observer 3/13/88 

Shipping agent for Tiber-rolling machine shipped to Libya's Central Repair Workshop 
in 1991 

German Customs Documents 

Supplying 5.000 semi-trailors. along with Iveco of Italy, in a $329 million contract 
signed in 1991 

MEED 27 Sep 1991 

Supplied umdentiHed special magnets, of potential use in uranium enrichment 
centrifuges, to Shanf University, which has been identified as associated with the 
nuclear program and is controlled by tbe Revoluuonary Guards. 

BBC Panorama. March 6. 1993 
Parent of Ferrostabl. 

Der Spiegel Sept. 6. 1991 

Repair and expansion work of the Ahwaz steel plant. Abwaz is a major manufacturing 
center for Iran s military uidustries. 

MEED 21 Feb 1992 

Test equipment allegedly supplied to Bandar Abbas Silkworm missile project: LA9nD 
trucks, used as launch vehicles for the Oghab artillery rocket. 
P.MUI press release. Feb 2. 1991 

Onginal research team for Libya s Otrag balUstic missile program were former MOD 
engineers German invesugators beheve that MBB supplied production equipment aiu 
design information as well, although this has never been formally established and is 
denied hy the company 

Geerd Greune. Bundesdeuischt Rakelen in Zenlralqfrika " 



138 






Mcrccdct BcBi 


Germany 


Inm 


MclallgcselUchan 


Germany 


Inm 


AG 




CW 


MFC, 


Germany 


Syria 
WM 


Orbll Elektronlsche 


Germany 


Libya 


Vtrlrlcbsgescllicha 


f 




1 




MT 


Orbital Transport 


Germany 


Libya 


UBd Raketen AG 






(OTRAG) 




\TT 


Packard Instrument 


Germany 


Syria 


Grabh 




Nuclear 


Pawling and 


Germany 


Libya 


Harnishchfeger 




CW 


Philips Medliln 


Germany 


Iran 


System Gmbh 




Nuclear 


Prcussag 


Germany 


Ltbva 
CW 


Raab Karcher 


Germany 


Lib\a 
CW 


REI MDS 


Germany 


Iran 


Deutschland (;MnH 




WM 


Rhelnmelall 


( Icrmanv 


Iran 
WM 


Rhenus 


(icrmjiu 


Libya 
CW 


Ro«e GmbH 


(iennjnv 


l.ihva 



Country Citcturr DtitrlBllfla 

Cennany Syria This Mumcb-based company contracted to supply umdeniiTied equipment to CERS in 

May 1992 

Mtdnrwi 8/17/92. 
Supplied LA9I IB trucks used by Iran as launch vehicles for the Ogbab artillery rocket: 
in early 1992. esublistaed joint venture with Kbavar Company of Iran to build 
beavy^Juiy trucks (19 lo 26 tons) and diesci engines in Iran. 

Jane'i Soviet Inulligence Review. April 1989: Iran Focus. Vol S. No 2. page 14. 

Parent company of Lurgi. signed a 44-montfa contract ui 1988 for engineenog 
consulting services, to build a major pesticides plant near Qazvin 

TTu Observer 3/13/88 

This Siungart-based company contracted to supply unidcntiried equipment to CERS in 
May 1992 

'Weapotu of Mass Deslruciion." Simon Wiesenlbal Cenur. August 1992: 

Uednews 8/17/92. 

Supplied telemetry systems to the Otrag program in Libya: company lun the head of 
Helalronics. Helmut Lang. 
Stem Jan I. 1987 

Helped devek>p 'sounding rockeu' and provided technology for a ballistic missUe 
project which has suice come to be known by this company s abbreviated name 
Wall Street Journal. Apr 17. 1987: John Cooley. "Libyan Sandstorm" 

Supplied compuieis purchased in the U.S. in 1987 to the Syrian Atomic Energy 
Commission. 

'Weapons of Mass Destruction. " Simon Wiesenlhal Center. August 1992 

Mobile cranes for Rabu plan. 

Washington Times. Jan 16. 1989 

Gamma cameras and accessories supplied to nuclear medical institutes. 

'Weapons of Mass Destruction." Simon Wiesenihal Center. Aufusi 1992. 

Water punricalion systems for Rabta plant. Preussag was a major supplier lo Iraq s CW 
plants 

Stem Jan 12. 1989 
Building materials for Rabta plant. 

Der Spiegel Jan IS. 1989 

Disk drives and computers for resale by a tocal distributor. Iran Argbam. to unJuiovm 
end-users in Iran 
Mednews 6/8/92 

Provided technical assistance and equipment, to help rebuild Iranian weapons plants i 
the early 1980s: in particular, heavy artillery munitions lines. 

DMS Market Intelligence report. 1984: Medmvs 8/1/88 
Transporter for equipment shipped to Rabta plant. 

Stem Jan 19. 1989 

Front company run by Hans Joachim Rose that tried to purchase a Siemens 
process-line control system for the Sebha CW factory A German iiiiellieence report 
CW in 1991 saiJ Rose has been associated for several years now wiih the Libvan 

chemical warfare programme by supplying articles and protective t.-L|Uipment 
Granada TV -World In Action." Apr 2. 1991 



139 



Company Counlf y 

R«4«i Cbemtc Oennany 

International 
"HandcU GmbH 



SalzKlUcr Germany 

ladustrlebau GmbH 



SchotI Glasswerke (lermanv 



Scholl Rohrelas Gefmanv 

GmbH 



Siemens 



SteMerlng 



(ierman\ 



Sllelzcl and DlcdrUh (icrmjn\ 



TechnKcher liermjiu 

L'eberwachunfisverei 

n (Tl'eV) 



Tflemit Mi 



Cateyorv 

Inm 

CW 

Ub\a 
CW 

Svna 
CW 

iron 

Nuclear 
Iran 

Nuclear 



Siemens 


Ciermany 


Ub\a 

^^T 


Sicmme 


(iermany 


Iran 
Arms 



Ub\a 

MT 

/.ii>va 

Anns 

Iran 

Nuclear 
Ijbva 



Dticrlnlloa 

Sold 100 loiu of todiuin cyanide lo a Belgian inlcnnediary, Atcxco. wbicb ibipped to 
an Iranian 'mining' company in Ocl 1990. Blocked en roulc in Turkey and reuiined lo 
Ajtfweip Company bad 3 addiuonal exports refused by German govenunent 
Mtdnrwt }/tS/9l. 4/IW9} 

Tbis Stale owned iteel company provided indunhal planning and blueprints for the 
Rabu plant; a former Saltzgilter's director was arrested in Germany on Jan 8. 1991 for 
bit role in ibe Rabu project. 

WathinifioH Post. Jan 17. 1989: Reuun Jan 8. 1991 

Corrosion-resistcnl glass pipes for synan CW production plant: sann components 
soM in 1983 as 'boro-silicau glass', addiuonal deliveries to Synan chemicals plants 
licensed in 1991. 

WSJ Stpi 16. 1988: BBC PoHomma. Ocl 26. 1986 

Supplied 5.000 kg of glass tubes in 12 palettes lo ibc Atomic Energy Organizalon of 
Iran - Nuclear Researcb Center, in June 1991. 

GerniOA Customs Documents 

Parent company of KWU: shipped 28.000 tons of parts and equipment for tbe Busheir 
reactor, following an arbitration court ruling in 1991; awarded manufacturing licenses 
for telephone switching gear to Iran Telecommunications Industry; contracted in Aug 
1992 10 build a 1.400 MW conventional power plant on Qeshm island; sold S2l 
million worth of computers, conununicauons equipment, and integrated circuits with 
military and civilian applications to Iran Telecommunications Co and other slate-run 
organizations. 

Mednews. "Iran pledges to complete nuclear plant." Apr 29. 1991: AP 8/3/92: .\P 
5/14/92 

Supplied production equipment to the Olrag group in the early 1980s, through the Hela 
Tronik front company. 

'Weapons of Mass Destruction." Simon Wiesenlhal Center. August 1992. Cf: Karl 

Gunitier Barth. "Deutsche Kaketen fur GadtioTi". Stem. Dec 23. 1986. 
S3 milhon (DM 6 5 million) contract, concluded in 1993. to sell Slemme SIO VC 
remotedly piloted vehicles for airborne reconnaissance and. eveniualiy. tenorist 
operations. Iranian clienL Barpbal Lid. has asked for a total technology transfer, to 
include training of Iranian production personnel in Germany. A Polish aeronautics 
firm. Andre Paptorek. has been chosen as an intermediary, to disguise the sale from 
German authorities. 

Subcommntee documents 
Contributed lo tbe Otrag missile project in tbe early 1980s. 

Stem Jan I. 1987 



In-flight technology 

CBSN I Bonn I Jan 23. 1989 

The Federal Republic's reactor inspectorate has been collaborating ^fclth Siemens ana 
kWll. to determuie the extent of damage to the Busheir nuclear reactors in Iran. 
Inspecu>rs sent to Iran in 1991 detemuned it would cost DM 5-8 billion to repair the 
reactors, and proposed supplying new reactors instead. 
.\tari Hibbs. Nucleonics Week. 5/2/91 

This Muntch-hased defense company was purchased by Qaddafi's broiher-in-law. Saler. 
Tarkash. in 1979. and acted as one of Libya s primary front company s in Europe lor 
more than 10 years. Believed to have cooperated with Fntz Werner lo supply 
machine-tools lo al Fatah program. 

Wilhflm Dieil and Waller Schuiie. "Deutsche Rustungsfabnk gehort Ghnddafi " 

Ouu-k. Jul\- 6 1989 



140 



Cnmomnv 



Tkytfca 



TOP Ttchnologle fUr Cicrmany 
Erdolproduklloncn 



Turborillcr CimbH (icrmany 







Gcnnuiy 


Libya 




av 


Germany 


Iran 




Nuclear 


Cicrmany 


Libya 




Ml 


Germany 


Iran 




WM 


(icrmanv 


Libya 



Uhdc 



Germanv 



Webac 



Ciermanv 



Webcr GmbH (iermanv 



Weltronic t icrmanv 

Industrlevertrclun^c 



CW 



Syria 







CW 


Uhde 


(jermany 


Iran 

CW 


Vulcan Industrie 


Germany 


Iran 


HoldlnK GmbH 




WM 


W C. Heraeus <;mbH 


Germanv 


Libya 



Libya 

CW 

Syria 

MT 

Svrjrt 
Nuclear 



ne.crlnllon 

Provided hydraulic boisu lo Ibe Sebba cbemicali plant in 1990. 
FBIS NES 7 May 1990 (original tourct: Dtr Spiegel). 

Supplied unidentiTied high technology to Irani Sbanf University. idenuTied with the 
nuclear program and contioUed by the Revolutionary Guardi. 

Berliner Zeiiung 5/14/9} (Original source: German ZDF television. 5/13/93) 

This Munich-baaed company served as a front company for technology transfer to the 
Olrag program. 
Sleni Jan I. 1987 

Supplied CNC machines for military aircraft production: anempis lo ship spares from 
the US for the numerical control system blocked in 1988 and again in 1990 
'Weapons of Mass Destruction." Simon Wiesenlhai Center. August 1992. 

Supplied a de-dusting machine for the tunnel cutting machine built by 
Wesifalia-Beconu ostensibly for the Great Man-made nver project but believed used 
to build the Tartauna underground CW plant; machine worth DM 180.000 DM 
Frankfurter Allgemeine March 16. 1993 

Negouauons underway in laic 1991 to help build a large pbannaccuticals plant outside 
Damascus. 

Tender documents (French Embassy weekly economic review. 2 Oct 19911 
Buikling a pesticides plant in Isfahan in 1988. 

MEED 9/23/S8 

Parent company of H. Wohlenberg, which built an artillery plant in Iran in 1988 
Der Spiegel 1 June 1992 

Served as the 'domestic German purchaser' of a Leybold high-tempcralure furnace 
which was destined for Libyas al Fatah missile project. Since (his export was legal ai 
the lime, the German government bad to draft an emergency ordnance to block the 
delivery in 1 1/91. 

Mednews 10/12/92 
Supplied valves for the Rabta plant. 

London Sunday Times. 5 Apr 1992. 

Special furnaces and isostatic presses licensed to the Syrian Scientific Research 
Council (aka CERS) in 1990 and 1991. 

Mednews 9/28/92: "Weapons of Mass Destruction. " Simon Wiesenlhai Center 
August 1992. 

Shipped advanced computers, purchased by a US subsidiary. Welironic Inll VerinchN 
to a Syrian military research institute in 1986: a subsequent attempt was blocked in 
1987 



Westfalla-Recorit 


Ciermanv 


Libya 


Induslrielechnik 






GmbH 




CW 


Zink 


(icrmanN 


I.ib\ct 
CW 


Zwick <;mhH and Co 


(icrmarn 


Iran 



V^M 



"Weapons of Mass Destruction." Simon Wiesenlhai Center. Aufasi 1992. 

Supplied large lunelling machines to Libya via W& M Ltd. a Thai from company, in 
1991. ostensibly for the Great Man-Made River project, identified by the Sute 
Department m Feb. 1993 as intended for the Tarbuna underground CW plant under 

Frankfurter Allgemeine March 16. 1993 
Gas burning equipment for Rabta plant 

5(frn Jan 12. 1989 

Attempted lo supply materials test equipment lo the Revolulionars Guards (MiniNtr\ 
01 Scpahl in 1989 



141 



rnmninv CQUQlfY C«lcfnr» Dticrlpllnn 

VEB Sohlbaa Gcmramr Ubrm S^tl | 1--^- — (a, Jltbu pliDL 



lEisii 



Sum Jan 12. I9S9 



Cy Sivu Greece Inm Served u procuiemenl from for Ino for (he inilial purchase of 30 loos of lhiody|lyool 

Olkonomldls EE from AIcoIk USA in 1987. which lold for SS4.000. 

*-* U S Coun documtiai 

Aircraft Technology Hong Kong /nan Intennoliu-y for SI 6 billion weapons and technology deal tigned by Raftanjani wiih 

Ltd China in July I9gs The deal included the constniction of a large munidoos plant in 

WM Bandar Abbu and other arms production facilities. 

Mednewi. Auit I. 1988. 
Lamparl Hungary Ubva Supplied glau-luied reactor equipment for use at the Rabu plant. 

'Wtapotis of Mais Desiruclion. ' Simon Wusenlhat Center. August 1992. 

Bhahha Atomic India Iran Advanced discussions for a SSO million research reactor: offer withdrawn in lale 1991 

Research Centre by India under US pressure: apparently back in the works in March 1992 

Nuclear yi^pfo II/29AI 

Pesticides India India fran Subcontractor lo Lurgi for Qazvin pesticides plant: when Western supplien refused to 

provide raw chemicals (precursors) suitable for the production of CW agents, this 
CW company shipped thiodyglycol and other cbemicals to Iran. 

Der Spiff el V14/92 

United Phosphorus India Svria 25 Ions of trunethyl-phosphiie blocked by the German authorities on board a Geiman 

Ltd freighter in Cyprus on July 31. 1992. as it was bound for the 'Setama' company in 

CW Syna An earlier shipment of 43 tons reached Damascus on May 30. 1992. 

WSJ 8/10/92. U Monde. 9/24/92Der Spiegel. 41/92 (5 October) 

FIbchcm Iran Iran Iranian procurement organization for the purchase of a $100 million acrylonilrile 

plant, used tn manufacturing synthetic fibers, from the U.S. subsidiary of Bnush 
CW Petroleum The plant was to produce hydrogen cyanide as a byprxxluci. The deal was 

killed by the While House in Dec 1992. 
MEED Jan IS. 1993 
M/S Kay Textile Iran Iran Iranian from for purchases of thiodyglycol. used in mustard gas production. 

Industries U S Court documents (Alcolac Customs case) 

CW 

Melll .-Xgrlcultural Iran Iran Iranian procurement front for initial negotiations for the Qazvin pesticides plant. 

Chemicals Appioacbed John Brown [qv]. Sponsor of Nanm (qv). 

<■* Vnj Sederlwut 1 7 march 1990 (FBIS WEU 22 May) 

Nargan Consuliinki Iran Iran Iranian partner of Lurgi. for pesticides planL 

Engineers Der Spiegel 2/14/92 

CW 

Narlm Iran Iran Iranian procurement front for initial negotiations for the Qazvin pesticides plant. 

Appruachcd John Brown 

'■*' Vnj Sederiand 17 march I990IFBIS WEV 22 Mas) 

Saderhank Tehran Iran lr(u> Financed sale of IBM supercomputer to [ran in 1992 and 1993 by Re^a Zandian and h 

Iran Business Machines 
I injnciai OEEajfadavu. 1/9}. 

.\cr l.lnnus Ireland Iritn Served as front for shipment of military aircraft spares starting in 1979 Sought 

assisunce from Dane Aircraft. Aero Systems, and other US companies slartmg in 
,\rms 1981 

South Florida Business Ne^^s 1/29/90 



-7C /nc /-I 



142 



rnmBittr 


CflMDlfY 




Lm^ & Norlhrup 


Ireland 


Inm 


IrcltBd 







AGIP Nuclcalrc 



ABtaldo Glc 



Banc* Nazlonal 
Lavoro (BNI.) 



Breda 



CNF.N 



Danlell 



ENI 



ISI ImplantI 



ItallRiplanll 



1 veco 



Oto Melara 



Pelcrlee 



Italy 



Italy 



Italy 



Italy 



lialv 



Italy 



Italv 



llah 



llalv 



halv 



Snia Hpd 



It3l% 



llaU 



/no/l 

Nuclear 
Iran 

Nuclear 
Iran 

Anns. 



Iran 

Nuclear 
Iran 

Nuclear 
Iran 

WM 

Libya 
Nuclear 

Iran 
Arms 

Iran 
WM 

Iran 

Ml 

Iran 

WM 

Ltb\a 

t-W 
Iran 

WM 



DeacrlBHoa 

Computerized traininft equipmeiM for Iraniao lecfanicians working in a fluonoe and 
beaafluonde planL Tbe Intta branch of LAN a aervuig as the inlennediary for mucb of 
Ik* a«aK«nent purchased for thu plant m the U.S. (British Nuclear Fuels clauns that 
Uk OoC misriled this espon request, and thai the plant was built in Ireland, not Irani 

"WtapoHM of Matt DtimclioH,' Simon Wittemhal Ctnier. Aufutl 1992. 
Part-owner of Eurodif consortium 

Tribune de I'Espantion, 10/28^1 

Supplied power generators which allegedly used al tbe Moallem Kelayeh nuclear 
research cenier. atlempied to esport VAX computen to Iran. 

PMOI bntfing, June 4. 1991: Department of Commerce recordt. 

Indicted in Venice in late 1992 for schemes to Tinance and disguise shipments of arms 
and munitions worth at least several hundred million dollars from France and Italy to 
the Iranian Ministry of Defense dunng the Iran-Iraq war. Fifty-nine people in loul 
have been indicted. 
WP. Dec 25. 1992. 

Built generators for Busbeir nuclear power plant, but Italian foreign minister says ihe> 
will not be exported to Iran. 

Nucleomct Week. 6/6/91. 
Share-holder in Eurodif consortium 

Tribune de VExpantion. 10/28/91 

Has contracted to modernize the Soviet-built Isfahan steel works, which directly feeds 
into Iran s largest military manufacturing complex. Nippon Steel of Japan will 
provide technical assistance on this S660 million contract. 

"Weapont of Mats Destructton," Simon Wietenthal Cenier. August 1992. 

Helped TuiaiKe Project Hamid. an aoempt by Libya to purchase S620 million worth ot 
French nuclear equipment by transferring stock worth 500 billion lira to Uie Libyan 
embassy in Paris and then to a Lebanese intermediary. Gabriel-Anioine Tannoury. in 
1980 and 1981. 

Iraellifence Newsletter March I. I9S9 

1991 contract worth $600,000 to supply a wind tunnel and training to Sbiraz 
University. Believed for use in mdigeneous aerospace programs. Contract includes 
training of university personnel in Italy, installation, testing, and final training of 
Shuaz staff in Iran. 

Iniemaiional Defense Review. 8/91 

Has contracted to build an all-new steel complex at Mobarakeh. 70 kin from Isfahan, 
with production feeding into military and civilian factones in the Isfahan area dotal 
project cost will be at least S4 7 billion). 
MEED 21 Feb 1992: MEED 29 Nov 1991 

Supplying S.OOO semi-trailors. along with Magutis of Germany, in a 5.^29 million 
contract signed in 1991 
MEED 27 Sep 1991 

Provided technical assistance and equipment, to help rebuild Iranian weapons plants i. 
Ihe early I9g0s. 

DMS Market Intelligence report. 1984. 
Unspecified equipment for the Rabta plant. 

London Sunday Times. 5 Apr 1992. 

Provided technical assistance and equipment, to help rebuild Iranian ^^eapons plants i 
ihe earlv 1980s 

DMS Market IntelUi^ence report. 1984: Mednews 8/1/88 



143 



TecDimonI 


Italy 


Ircm 
CW 


Valiclla 


Italy 


Iran 


Mechanllcchnlca 




Anns 


Afsoclallon of 


Japan 


Nonh 


Korean Rcsidenis In 


Korea 


Japan 




Nuclear 


(Chochongnyon 1 







Japan 



<:QmBlBT CBUnlfT Cattfor. DtacrlpHoa 

Teckmi^clrolc lialy /ran Mas coniracisd lo build ethyleoe and other cfaemical proccMing planu ai (be Tabriz 

and Arak petrochcoucali comptexu in Iran, along wiita iti Fnncb motbcr compioy. 
CW Jmktt^ Wktii Ittu* to li^ilin"' civilian projecu. etbylene bai multiple miliury 

UM<. including at a muslard gas precunor and fuel-air explosives. 
Us Echaei March S. 1991 

Engmeenng and oonsirucljOD wort at the Tabriz ethylene base complex (contract 
worth $400-500 million.) In addition to numerous civilian applicauoiu, ethylene has 
diverse military uses includuig as a muslard gas precursor. 
PeiroUs ei Goi Arabet 16 Sep 1991 

Supplied up to one million naval mines in the early I980t. using explosives 
purchased through a European gunpowder *carter that included Bofors. SNPE. 
Nobelchcmie. and a dozen other European producers. 

LEventrntm du Jeudi. 23 July 1987. 13 August 1987: The Naiuin. July 19. 1987 

Major conduit for the smuggling of advanced dual-use technologies from Japan to 
Nonh Korea An attempt in Sept 1988 to smuggling 1300 pieces of equipment 
including semiconduciors and computers, was blocked at Nibigau: in June 1988. an 
attempt to ship nuonne rubber and ultra-low temperature lubncanu for submarines 
blocked. 

Seoul Choson llbo Apnl 3. 1990 (FBIS East Asia 4/29/90) 

Major conduit for the smuggling of advar>ced dual-use technologies from Japan to 
North Korea, especially in the areas of panicle acceleration and centrifuge uranium 
ennchment: its ofricial objective is to 'contribute to the construction of North Korea 
by raising tlte level of academic reeaich and technological development by Korean 
scientists in Japan.' 

Seoul ChosoH llbo April 3. 1990 (FBIS East Asia 4/29/90) 

Vice Chairman Kim Pyong-lo attempted to smuggle 1.300 pieces of equipment to 
Nonh KOrea on board the Samjiyon-hc. blocked at Japan's Nibigala port on S Sept. 
1988 for COCOM violauons. Equipment included NEC computers and integrated 
circuits Kun was fined 200.000 yen on 31 March 1989 

Toino S>u>kun. May 1990 (FBIS EAS 4/10/90) 

Supplied computcnzed numerical controllers and machine-tools installed in the Rabta 
CW and munitions plans. 

UtndoH Suntlav Times. 5 Apr 1992. 

Manufactured computers purchased by Nonh Korea in the early 19g0s. as attempt to 
upgrade technology in weapons design. 

Seoul Sin Tonf-A Dec 1990 (FBIS EAS 1/25/91) 
Bomb-plant at Rabta for CW bombs. 
Mainichi Sept IS. 1988 

Supplying boilers and production equipment for major steel complexes ai Arak and 
Mobarakch. 

MEED 4 Mav 1990. 21 Feb 1992 

Helped smuggle 21.000 controlled scientific documents to North Korea in 1987 
through North Korea residents in Japan. 

Tokvo Shokun. Mav 1990 (FBIS EAS 4/20/90) 

Steel works for Rabta plant. 

Chriiiian Science Monitor. Dec 13. 1988 

Major subcontractor for the Mobarakeb steel and galvanizuig plant Production villi 
feed inio civilian and military factones. steel service center with conunuous ga 

MEED 21 Feb 1992 



Asfoclallon of 
Science and 
Technoloj>y of 
Korean Residents In 



Chamber of 
Commerce and 
Industry of Korean 
Residents In Japan 



Faauc 



Hitachi 



Japan 



Japan 



Japan 



Japan .Steel Wnrk<i Japan 



Kawasaki Steel Japan 



.\onh 
Korea 
Nuclear 



Nonh 
Korea 
Nuclear 



Libya 

WM 

Nonh 
Korea 
WM 

Lib\a 

CW 

Iran 



Kuwnl Subane 


Jjpan 


\nnh 
Korea 
Nuclear 


Marubeni 


Japan 


l.ihva 


Marubeni 


Japan 


(ran 
WM 



144 



f nmp«nY 
MIKubUhl Heavy 
Indutirlet 

N«k«mlchl 
CorporalloB 

Nippon Steel 



Tecsang Trade 
Cooipan* 

Tome! Shojl 



rnunlrv r.l»»orv 
Japan Imn 



Japin 



lapan 



Japan 



Japan 



Cealral Workshop Lib>a 



fnai 

MT 

Iran 

WM 

North 
Korta 

Aims 

North 
Korta 
Nuclear 

Ub\a 







VfT 


Jamahuriyah 


Libya 


Libya 


National Company 






for OH Well Fluids 




ON 


and Equipment 






Misurata Research 


Libya 


Libva 


Center 




MT 


Technical Industrial 


L.b\a 


Libva 


Corporation 




MT 


Jubel Trust 


Liectiiensiein 


Libva 



MT 

APV Hill and Mills MaUvsu Ubva 

CW 



Pacific Wide 



Maral 



M3lj\sia l.ibxa 



MjIu 



Ub\a 

rw 



Hvsia 



Me«:.o Iran 

WM 



n..rrlntloa 

Building 1200 MW power station near Qazvin. to power a wcfct uranium ennchmeni 
plane purchasing licensed goods in the US. for Iran. 

"AHatfBtfau ^ M^u ^mmvcmmi. " Smma m^^^jy^^ CsMU^. J^tAMSt J 992. 

PajCTt company of Mounlaui Optecfa Inc. which auempled to sell computer paiu to 
Iran ui early 1993 for usa m a military reconnaissance satellite. 
JINSA Securtry Affain. Juiu-Jidy 199). 

Subcontractor to Danieli of Italy to modemiu and expand the Soviet-built Isfahan 
steel worlu. which directly feeds into Irans largest mditary manufacturing complex 
'Weapoiu of Mass Deslniction.' Simon Wiesenthal Center. August 1992. 

Smuggled radars, sonars, and integraled cucuits from Japan to North Korea between 
1984-87 Joint North Korean-Japanese owned company. 
Seoul Choson llbo April 3. 1990 (FBIS East Asia 4/29/90) 

Smuggled 1 .628 iniegrated circuits, mcluding 102 controlled by COCOM. to North 
Korea in July and August 1985. EarUer that year, shipped microwave frequency 
measuring instnimenu to a staie-mn trading house. Choson Yongaksan 

Seoul Singdong-A. Aug 1990 (FBIS East Alia. 10/15/90) 
Procurement front for the Al Fatah missile program. 

Simon Wiesemhal Center. "Weapons of Mass Destruction." Aug. 1992 

Served as procurement front for purchase of eight stainless steel vessels from APV 
subsidiary in Malaysia, for the Tarhuna poison gas works. 

Alan George. "Libyan Poison Gas Deal Blocked. ' The Guardian. 3/22/93 

Procurement front used by Libya for its Al-Fatah ballistic missile project 
Mednews 11/4/91 

Procurement front in Libya for the Olrag missile program. 
Stem Dec. 23. 1986. 

Alleged Libyan front company, working with Fritz Werner and other Germany 
companies to supply production equipment for the al Fatah program. 

Wilhelm Dittl and Walter Schutte. "Deutsche Rusiungsfabrik gehon Chaddafi. ~ 

Quick. July 6. 1989. 
Principle intermediary for sale to Libya of eight stainless steel reactor vessels, made 
in Malysia by Pacific Wide, that were seized on March 5. 1993 by Singapore en touic 
to Tarhuna. 

Alan George. "Libyan Poison Gas Deal Blocked. " The Guardian. 3/22/93 

Manufacturer of eight stainless steel vessels sold lo APVs Malaysian subsidiary. Al'\ 
Mill and Mills and shipped to Libya. Shipmeni seized by Singapore on March 5. W->- 
Man George. "Libyan Poison Gas Deal Blocked. " The Guardian. 3/22/93 

Attempted on Nov. 19. 1992 lo purchase replacement parts for tunnelling machines 
provided to Libya by German companies for use m the Tarhuna proejct. without 
success- 

Frankfuner Allgememe March 16. 1993 

llysia will help complete work on the 'Nasr Project" al the Ahwaz siecl works, whieh 
will feed inlo the mdilary faclones m the Ahwaz area Total steel producuon al Ah»a/ 
IS projected lo reach 17 million tons when the project is complete The total projeci 
will cost over S3 5 billion, (production in 1992 was 200.000 t/year) 
MF.F.D 21 Feb 1992 



145 



Company 
Eurablc 



Joho Brown 
EDfclneers 



Oragan 



Netherlands 



Netherlands 



Category 

Ubva 

MT.CW 

Iran 
CW 



Netherlands Svna 



Orlct 



Netherlands 



Cbanggwang Credit North Korea 
Corp 



City Varvet Norsk Norway 

A/S 



Kockums Computer Norway 
Svsiem A S 



Institute for Nuclcitr Takibtan 
Sciences and 
Tech nil logy 



Nuclear Studies 
Inslllule 



Pakiiian 



PakUian Atomic Pakuian 

Knerey Organiialinn 



Phllippine\ long Thilippinc 

DKlunce Ttrlephiinc 
Company 



CW 

Ubva 

Arms 
Svna 

MT 



Choson Yongaksan 


Norih Korea 


Sonh 


Exporl-lmporl 




Korea 


Company 




Nuclear 


Lyongaksan 


North Korea 


5vria 


MachlneriK and 






EqulpmenI Kiporl 




MT 


Corp 






Pyoneyang 


North Korea 


Iran 


Semiconductor 






Manufacturing Co 




WM 



Iran 

WM 
Iran 

SVM 
Iran 

Nix: tear 

Irttn 
Nuclear 

Iran 
Sixlear 

Iran 



Dticrlptloe 

Sbipmeni of US. ongui laser equipmeni for Libya's M Falih missile program blocked 
by German Cutloms in Dec 1991. after uiveiugauoo by DTSA. Eurabic also provided 
software Eurabic allegedly shipped CW precuson to Libya in 1989. 
Hamburg DPA. 1/22/91 (FBIS NES 1/23/91). 

Approached in late 19S7 by Iran to buiM a pbospboius peniasulTide factory, for 75 
million guiklers. based on US palenu from Slauffer. Project TinaJly blocked by Dulcb 
government, after heavy pretsure from the US. [Company sayi they withdrew for 
commercial reasons prior to government objections). 

Vrij Nedtriand 1 7 march 1990 (FBIS WEU 22 May) 
Negouations underway to help build a large pharmaceuticals plant outside Damascus. 

Simon Wusenihal Cenltr, "Wtapoiu of Mass Dtslruclion. ' Aug 1992 

The Dutch government acknowledges thai it had auihorued the re-export to Libya of 
US laser equipment made by Oriel. 

WP 1/24/92 

Idcnuried by the Sute Department in a July 7. 1992 order imposing missile sancuons. 
as having sold ballistic missiles to Syria. 
Etporr Control Nrws. July 30. 1992 

Suie-run trading company used as a front to purchase computers and other controlled 
goods from Korean-Japanese networks. 

Stoul Singdor.g-A. Aug 1990 (FBIS East Asia. 10/15/90) 

IdenuHed by the Slate Department in a July 7. 1992 order imposing missile sancuons. 
as having sold ballistic missiles to Syria. 

Export Control News. July 30. 1992 

Supplied missile guidance components for North Korean SCUD-B and SCUD-C 
missiles sold to Iran. Tbis semi-conductor plant was built with a grant fivm the UN 
Industrial Development Organization (UNIDO). 

Jane s Soviet Intelligence Review. April 1989. Joseph Bermudez A Seih Carus 

CAD/CAM software and computer systems, to military shipyard for ship design and 
repair 

Weapons of Mass Deslruciion." Simon Wiesemhal Center. .August 1992. 

CAD/CAM software and computer systems, to imlitary shipyard for ship design and 
repau 

Weapons of Mass Deslruciion." Simon Wiesemhal Cenier .\ugusi 1992 

M Iranian nuclear physicists were sent for training at this state-run nuclear institute i:i 
Islamabad. Pakistan m Oct. 1988. following a secret nuclear pact signed bervieen Iran 
and Pakistan. 

Mednews. I2/5/S8 

Iranian nuclear scientists were sent to this state-run institute in Nowlore. Pakistan, in 
1988. following a secret nuclear pact between Iran and Pakistan to learn reprocessing 
and uranium ennchment technoogies. 
Medney^s. 12/5/88 

Supervised training of Iranian nuclear scientists starting in 1988 at a variety of 
nuclear research labs and institutes in Pakistan, to learn reprocessmg and uranium 
ennchment technoogies. 
Mednev^s 12/5/88 

Serving as inlermediarv for sales to Iran of satellite technology for US based 
companies, and under investigation by US Customs for this activity 
Los Anteles Times. 5/20/93 



146 



rnmimlT 

Aadrt Paplorck 
Coapany 

ATlatiport 



Inttllulc of Eleclrlc 

Phvtlcal 

Organliallon 

Ministry of Atomic 
Power and Induilry 
(MAPI) 

Pavoks 



SpcltvDcihlechnlka 



VO Obcronciporl 



rnuntrv <:»ltt(irT 
Poland If 

Anns 
Ruuia /'<■' 

WM 

Russia Nonh 

Korra 
Nuclear 



Russia 


Iran 




Nuclear 


Russia 


Z-ifcya 




i^ 


Russia 


Iran 




Arms 


Russia 


Iran 




MT. Ann 



BIto Electronic 
Company 



Seychelles 
iDlernational Rank 



Hallet F.nterprlscs 



Korea Power 
EnRineeering Co 
(KOPKC) 

Kwang Jin Tradinc 
Co 



Associated 
Enterprises iif Spai 



Seychelles Ub\a 
Nuclear 

Seychelles Libya 

Nuclear 
Singaptire Iran 

CW 

Souih Korea Iran 

Nuclear 

Snulh Kv>rcj Iran 

c-w 

Spam Irtin 

n 

Nuclear 



n».erlpllon 

S*rvu>| as inlennediary for the tale of Stemine SIO RPV aircnft to Iran. 
Subcommiiue documenii. 

Supply of a complete, turnkey assembly plant for local manufacture of MiG-29 Ti^bier 
aircraft. 

Mednews 25/11/91 

Provided technology, installation, and training of North Korean operators for a 
nuclear cyctoiron. built in North Korea ui 1992 under the auspices of the IAEA and 
UNDP 

Pyongyang KCNA 4/11/92 

Signed March 6. 1990 protocol with Iran to build two 440 MW power reactors in Iran 
and help complete the Busheir nuclear complen. Protocol initialled during inp u> 
Tehran by Soviet Railways Minister. Nicolai Konarev. 

Nucleonics Week. }/l5/90l:Defenst and Foreign Affain Weekly 3/19/90 

Illegally shipped 80 tons of ammonium perchlorate for solid rxx;kei systems to Libya, 
through a Serbian intermediary Falsiried export documents. Sbjipment detained by 
Ukrainian government in June 1993. 
Expon Conirol Sewt 6/24/93 

Coordinaung agency for the consmiction of a MiG-29 assembly planu part of a S3 
billion anru package signed in 1991: may have transferred solid propellanl rocket 
technology in 1981 for katyusha rocket production at Semnan. 
Mednews 11/25/91. 3/1/93: Mednews 8/1/8S 

DeUvered 100 surface-to-surface missiles in 1993. probably the upgraded SS-21 
(Tochka-U). a 120 km guided rocket with a CEP of less than 100 meters: coordinatm^ 
i agency for all Russian arms sales to Iran, uicluding Kilo-class submarines. MiG':9 
Su-24. and Tu-22M Backfue bombers. 

Wos/iiflfion Post (Outlook section). Sept 5. 1993: Janes Defense Wreklv Srpi ' 

1993: Mednews 3/1/93 

Authorized by the French government to sell used military equipment from FrencD 
nuclear weapons esublisbmenst, this company agreed to sell S620 million »orth e; 
nuclear equipment to Libya in 1980. through a Lebanese intermediary. Gabriel 
Tannoury 

Liberaiion. June 2. 1986. 

Financial front controlled by Sasea Inlenrade. which used to handle payments tor 
Project Hamid nuclear purchases from France. 
Intelligence NewsUtter. March I. 1989 

Served as procurement front for Iran for subsequent purchases 60 and 120 Ions ol 
ihiodyglycol from Alcolac USA in 1987 and 1988. Customs subsuiuied »ai£r lor ir.e 
120 ton shipment on Apnl 21. 1988. 
VS. Court documents 

KOPEC sent a survey team of nuclear technicians to Iran m February 19W to vonJL^i 
feasibility siudy to reconstruct Busheir. 

Missile Monitor: Doc 4262. Nuclear Developments. March 16. VO The Korean 

Times I Seoul I. March 2. 90 
Supplying chemical weapons technology under cover of a Xemeni project in 
19881989 US equipment shipped to Seoul, then turned around wiihoui unloaJir^ 
Iran. Principle Kwang lin Joo an unindicted co-conspiraior in the Kernel 
International case 

U.S. Court documents 

Signed a nuclear protocol with Iran in Feb 1990. lo build two nuclear power pianis j 
Busheir. with the help of INI Enterprises (National Insutule of Indusirv i. LNS.^. ar.j 
KNUSA 

El Indepenrtienie I, Madrid I. 2/5/90 and 2/6/90 



147 



rompanv Country 

E i pr w Naclonal Spaui 

Saola Barbara 



Xm 



Empresarlof 
Agrupadot 

ENSA 



ENUSA 



Spam 



Spain 



Spam 



Equipos Nucleares Spam 



INI Enterprises Spam 



MS Systems 



Senner 



Spam 



Spam 



Texconsullancy und Spam 
Engineering 



Bofors 



EFV 



Iran 

Nuclear 
Iran 

Nuclear 
Iran 

Nuclear 
Iran 

Nuclear 
Iran 

Nuclear 
Lib\a 

Anns 

Iran 

MT 

Iran 

Arms 
Iran 

WM 

Lib\a 







MT 


Nobel Chemic 


SwcOcn 


Iran 


Scandinavia 


Sue Jen 


Iran 


Commodities 




WM 


Strands SM(; 


SweJcn 


S\na 
WM 


Teleplan 


SwcJcn 


l.ihva 



\n 



DgicriDlloa 

Craaittj penniuion in inid-1989 by Ibe Sptniib govcnuneni lo modemiu in Irtnitn 
propellini and eiplotivei (•dory The project begin in 1983-86 bul wu lutpended 
> "" i i. »t Oftmtiam Stmmk- fuJory will produce 'ipbcroidal' propeUinl developed 
by Sanu Btrbara. reportedly superior in performuice lo convenuonal (ypci 

'Irtuuan vtMun for Sanla Barbara?.' Inumaltonal Defeiue Review. Apnt 1989. p 
516 

In negoijtuoni wtih Irni'i Atomic Energy Orginiuiion to work on completion of the 
Busbcir nucleir power pUnu 

Nucleontcs Week I I/9/S9 

Puucipaung in nuclear protocol with Inn signed in Feb 1990. in undem with 
Associated Enterprises of Spain. 

El Indepemdiente (Madrid). 2/S/90 and 2/6/90 

Participating in nuclear protocol witb Iran signed in Feb 1990. in tandem witb 
Associated Enierprues of Spam; member of the Eurodif consortium 

£2 Independienie I Madrid). 2/5^0 and 2/6/90: Tribune de lExpamion. 10/28/91 

This Siemens-licensee is trying lo gel subconlracu from Siemens lo complete the 
Busheir plants 

Nucleonics Week. 2/7/91 

Signed a nuclear protocol with Iran in Feb 1990. lo build two nuclear power plants at 
Busbcir. in tandem with Associated Enterprises of Spain. 
B Independienie I Madrid). 2/5/90 and 2/6/90 

Reporu from Chile allege that arms-maker Carlos Cardocn. under mdictement ui the 
United Slates for bu dealings with Iraq, is using this Spanisb company for the sale of 
fuel-air explosives to Libya. 

Santiago Domestic Service 10/15/90 (FBIS NES 10/25/90) 

Contracted in tandem witb Degussa Switzerland to build a carbon black manufacturing 
facility in Saveb. 
MEED 9/23/8S 

Company was involved m a March 1992 altempl to smuggle Hawk. Crotale. and 
Stinger missiles and parts to Iran 

Diano 16. J/13/92 

Supplied large quanuties of gunpowder for naval and land muies; supplied equipmenu 
produciion plans, and loobng for a major muniuons plant in Isfahan which opened in 
1987 

Swedish Customs documents: Mednews 8/1/88: L'Evenement du Jeudi 23 Julv 19ls7 
Parent company of Telub. which provided training to Libyan rocket scientists. 
John Cooley. Libyan Sandstorm, p 237-238. 

Provided technical assistance and equipment, to help rebuild Iranian weapons plants in 
ihe early W80s 

DMS Market Intelligence report. 1984 

Organized the delivery of gunpower. munitions, land-mmes. and the construction of a 
large Bofors munitions plant in Isfahan. 

Swedish Customs documents 
Contracted to supply unideniiTied equipment to CERS ui May 1992 

"Weapons of Mass Destruction." Simon Wiesenthal Center. .\u^ust 1992: 

Mednews «//7/92 
Scnl defense electronics specialists to Libya in the late 1970s, to tram Libyans in 
guided missile techniques 

John Cooley. Libyan Sandstorm, p 237-238 



148 



rnmntnT 



Vol»o 



Acomcl 



Balmin Kommcrz 



BloeDgioctrlng AG Switzerland 



Bonaventure 



rnunlrv Ctltyorv Ducrlplloii 

Swc<k<i Libya Provided inlciuivc (rauing (o 96 Libyan officers from tbe Military Procurement 

Authonly in guidance fystems and other defense electronics from 1977 tbrougb 1982. 
MT aa^al«(4*aU«CMl.^«l JMnL 40vemment agreement between Sweden and Libya 

signed by Olof Palme in 1974 

Jobn Cooky. Ubyan Stuuislorm. p 237-238. 

Sweden Iran Volvo look over the Mack (ruck (Iran Kaveh) assembly plant in 1984. and is 

committed lo local assembly of 2,000 to 3. 000 heavy trucks/year, with direct 
MT military applications. 

IRNA 6/18/91 

Alleged sales of frequency conveners, used (o control uranium enrichment centrifuges 
( Acomel frequency conveners were discovered in Iraq's nuclear weapons program by 
Nuclear the IAEA). 

Ma'Aanv. 'Means of Destmction From Switvriand to Iran." by A. Rozfn and C. 

Shamron. 25 Jum 1993 (JPRSTND 8/19/93) 

Has contracted to buUd a steel service center with continuous galvanizing, electrolytic 
tinplate lines, and graphite electrode facilities, at tbe Mobarakeb complex. 
WM MEED 21 Feb 1992 

Iran A subsidiary of Bayer AG. this company was bombed twice in Switzerland (in Feb 

1992 and Feb. 1993). allegedly by Iranian dissidents, for bavmg supplied fermeniers 

BW and other equipment of potential use to a biological weapons program. Israeli press 

reports mention suspicion that the attacks were earned out by Mossad. 

Reuier. Feb 22. 1993: Al Hayal. Feb 24. 1993: Maanv 6/2S/93 

Involved in selling weapons and dual-use nuclear technologies to both Iran and Iraq. 
Company ofTicial Heinz PuUnann. a former Waffen SS officer, and bis panner. Bill Flo 
Nuclear Harvey, arc a well-known black market arms dealer. 



Switzerland Iran 



Switzerland Iran 



Switzerland Iran 



Br UK lies- Lambert 
Bank 



Celec 



Clb* C.elgy 



Clba Geley 



Deutche Bank 



Swiizeriand Libya 



Maanv 6/25/93 (JPRS TND 8/19/93) 

The Lugano branch helped orchestrate stock transfer fromltaly's state-owned oil 
company. ENL to Libyan embassy, to fmance Project Hamid. an aborted scheme lo 
Nuclear build a nuclear-upped rocket 

Intelligemre Newsletter. March I. 1989 

Switzerland Iran Allegedly began supplying special metal valves and high-pressure piping lo a Tehran 

research institute, for use m uranium enncbment centrifuges, following Operation 
Nuclear Desen Storm when similar contracts with Iraq were blocked. 

MaAanv. "Means of Destruction From Switzerland to Iran." by A. Rozen and G 
Shamron 25 June 1993 (JPRSTND 8/19/93) 

Subcontractor to Lurgi for construcuon of a pesucides plant near Tehran 
Der Spiegel 2/14/92 

Major supplier to the Syrian Ministry of Defense (DIMAS) of pharmaceuiical suppiK", 
and processes. 

Wfopo/u of Mass Destruction." Simon Wiesenthal Center. Aufusi 1992 

Served as front for Libyan front man Gabnel-Antoine Tannoury. in his aiicmpi lo 
purchase S620 wonh of nuclear equipment from France in 1981 

Intellitence NevsUtler. March I. 1989 
Supplied 5(X) tons of thidiglycol. a mustard gas precursor, during ihe Irjn-lraq war 

.Maanv 6/25/93 I JPRS TND 8/19/93) 



Geora Fischer 



Swii/crland 


Iran 




cw 


S^nucrljtid 


S\na 




cw 


Suit/crljiid 


l.ibxa 




Nuclear 


Swii/crlJiid 


Iran 




(•W 


S*ii/crUiiU 


Intn 



V^'M 



Supplied large quaniilies of CNC machine-tools to weapons plants controlled by uie 
Defense IndusU'ies Organization 

DIO brochures: Mednews march 1. 1993 



149 







CounlfT 


Cilcgory 


Clrlodut SA 




Switzerland 


Iran 

ha 


later- Commerce 




Switzerland 


Inm 


Trucband, Handcis 


& 






Fr«Di 






MT 


Karbii Co. 




Swiucrland 


Iran 



Krcbf AG 



CW 



Switzerland Iran 



CW 



Uwndcr of Giruidus Corp (US), which negolialed purctaaie of anunonium perchlorale 
froai PaciTic En|ineenng, an oitydizcr for solid fuel ballistic mutiles 

Purchased large quanuties of ammooium peichloraie rrem PaciTic En(ii)eenng ibrough 
Ginndus. reselling ii lo OA Dampf. of West Germany. 
IffT Mairh 29. 19S9 

Attempted to sell a turnkey pbospbor\is penlasuinde plant, ostensibly for petiicidcs. 
to Iran in ibe late I9g0<. Deal blocked after infononaiion relayed lo (be Swiu 
autbonues by US and Israeli intelligence. 

Ma'Aanv. 'Means of Destruction From Switzerland to Iran. " by A. Roun and G 

Shamron. 25 June 1993 IJPRSTND 8/19/931 

Negouated to build a pesQcides plant to make phosphorous pentasulfide for Amiton. a 
highly lotic insecticide; forced to abandon the project in 1989 under US and Swiss 
government pressure. [Iraq s first CW projects were based on purchasing 
Amiton-production equipment.) 



MBR 



Oerilkon Buhrle 



Switzerland 


Iran 




CW 


Swu/.crlanJ 


Iran 



Rcxioe Co. 



Sasea Inlcrlrade Cu 



Schwei/erlschen 

KreditansiaK 



Turconsult 



Werner Kleklrik 



Wild Heerbruuu 



Svni/crlJiid 



Svni/crUtiJ 



WM 



Switzerland 


l.ibva 




Nuclear 


Swii/crland 


l.ibsa 




Nuclear 


SwitzorlanJ 


l.ibxa 




CW 


Swit7crland 


Iran 



Nuclear 



NuclfJf 



C.AStlroup 



Iran 
NfT 



f*' 



IHT Mm 10. 1989 

Supplied a spu-al biological *fumace' lo Iran in early 1990s, for use in fenninlation of 
biological agents. 

Maanv 6/25/93 

Provided technical assistance and equipment, to help rebuild Iranian weapons plants in 
the early 1980s; supplied 'Skyguard* radar-controlled air defense systems and built 33 
mm munitions line. 

DMS Market Inielligence report. 1984: Mednews 8/1/88 

Front company domiciled in the Geneva headquarters of the Deutsche Bank that used 
by Libyan front man Gabnel-Antoine Tannoury to purchase S620 million worth of 
nuclear equipment from France in 1981. 

"Weapons of Mass Destruction." Simon Wiesemhal Center. August 1992. 

Front company controlled by Rono Fionni and working with Gaiih Pharaon. to seil 
S620 million of French nuclear equipment to Libya as part of Project llamid. 

Inielliitence Newsletter. March I. 1989 
Banking services in Zurich fo Rabla coivacts. 

Der Spiegel Jan 23. 1989 

Used as a front by Bonavenmre iSwitzerland) and by Jacques Toren. the vice president 
of the Geneva parUamenL for the transfer of weapons and advanced technology to Iran 
and Iraq Shares offlces and phone with Bonaveniure. Brokered the sale of FAE-80 
bombs (fuel air explosives) from Chile to Iran. 

Macnv 6/25/93 (JPRS TND 8/19/931 

Parent company of Acomel. which is suspected of having supplied frequency 
converters for uranium enrichment centrifuges. 

Ma'Aanv. "Means of Destruction From Switzerland to Iran." by A Rozen and G 
Shamron 15 June 1993 (JPRS-TND 8/19/93) 

Supplied ^aielliie mapping equipment and Global Positioning System iGPS) units to 
the Revolutionary Guards (Ministry of Sepah); attempts to procure U.S. systems from 
Magnavox rejected by the Department of Commerce m 1987 and 1988. 

Mednews 6/8/92. 

Synan investment group, run by Saeb Nahas. which is backing plants to build 
phaxmaceuiicals and chemicals plants with potential dual-use. 

Tender dociunents I French Embassy weekly economic review. 2 Oct 19911 



150 



romp«n» CflUDlfY 

lotcrnalloB*! Trade Syria 
■■d Commerce 
EfObllibmcal 



Syrian Sclentinc Syria 

Rctcarch Ccnlcr (aka 
CERS) 



U-Thal 
Thlembooaklt 



Thailand 



W&M Limited ' Thailand 



Air Products 



Alllvanc 



APV 



IIK 



UK 



IIK 



Atlas Equipment IK 



AWD-Redrord IIK 



BMARC 



IK 



British Nuclear KucU IK 



British Rocket Ltd IX 



Brown Roverl IX 

Company Limited 



Category 

/ran 

,UJ:Aas 

Syria 
MT 

Iran 

CW 
Libya 

CW 
Iran 

Nuclear 
Iran 

Anns 
Libya 

CW 

Iran 
WM 

Iran 

WM 
Iran 

Arms 
Iran 

Nuclear 
Libya 

srr 

Syria 
Nuclear 



DticrlBlloB 

Negouaied purchaaa of SI. 2 billion worth of Soviet weapons, including balliilic 
musiles. in 1986 and 1987. with iome shipments originating in Syria and Libya. Run 
by 4 Pilffliri"* lolennediary. Hassan Zobcida. 

'WtapoHi of Mail Dttiruction, ~ Simon Wittemhal Center. August 1992. 

IdenuAed by Ibc Stale Department in a July 7. 1992 order imposing musile sancuons. 
as having purchased ballistic missiles from Nonh Korea. Resesrch. development, and 
procurement arm of the Office of the President of Syria. 

Export Control News. July JO. 1992: Unconventional Weapons Proliferation 
(Simon Wieseruhai Report) 

Inleimediary who allegedly supplied plans of the Rabta chemicals plant ('Phanna 
ISO') lo Iran in spnng 1990 

Der Spiegel 2/14/92 

Intermediary for sale of large tunelling machines to Libya for the Tarbuna plant by 
Westfalia-Beconl loduslneiechnik GmbH. 
Frankfurter AUgemeine March 16. 1993 

Attempted lo sel 4S cyUnders of fluorine gas. used in uranium enrichment: license 
denied by UK government 

BBC Panorama. March 6. 1993 
Supplied fuzes and propellanis to Luchaiic. starting in 1983. for onshipmeni lo Iran 

Independent on Sunday. 22 Nov 1992 

Parent company of APV Hill and Mills in Malaysia, which manufactured (be eight 
stainless steel reactor vessels seized by Singapore on March S. 1993 en route to 
Libyas Tarhuna plant. 

Alan George, 'Libyan Poison Gas Deal Blocked. " The Guardian. 3/22/93 

Conlracied in 1992 lo build a £300.000 machine-lool. ostensibly for a water plant 
which the company believes could be used for nfling artillery barrels Alias and iis 
uansponer. UVM. volunieered information on the proposed sale to ibe BDC 
following a DTI ruUng that they did not requue a Ucense. feanng thai clearance would 
be cancelled later to Ibeir detriment 

BBC Breakfast News. June 24. 1992 

This company will upgrade and retool an exisung assemly Une in Kerman lo build 
2.000 Bedford trucks/year. A second assembly line will be built in mid-93. 

MEED 21 Feb 1992 

Supplied medium calibre munitions, weapons, and looling lo Iran via Singapore ui 
mid-1980s Subsidiary of Astra Holdings. 
Independent on Sunday. 22 Nov 1992 

(ufuipment for a fluorine and heiafluonde plant, believed to have been started in 1986 
The Irish branch of Leeds &. Nonhrup is serving as the intermediary tor much of the 
equipment purchased for this plant m the U.S. [BNF claims the DoC mistakenly 
entered Ihis license request in the Iran lisL whereas the plant was built in Irelandl 
"Weapons of Mass Destruction," Simon Wiesenlhal Center. Augun 1992. 

Negouated with Libyan government in 1983 to sell missile lechnology to the Oirag 
program: part of the British Aerospace Dynamic Group. 

Stem Dec 23. 1986 

Supplied large scale computerized control system in 1987. for a non-exisient nuclear 
power plant in Syna. 

"Weapons of Mass Destruction. " Simon Wiesenlhal Center. August 1992. 



151 



CmuBioy 
Cabuvmi UK Ltd 



DBI 



CounlrT 

UK 



UK 



FIsons Pic 



GISKCO 



ICI 



IX 



UK 



UK 



loternallonal UK 

Compuler Systems 

Ltd 



I ronbrld^r 



ITC 



CiltEorr 

Iran 
WT 



Iran 

Arau 
Iran 

Nuclear 



Syria 
CW 

Iran 

WM 
Svria 

WM 
iibva 





CW 


J.C. Tr.dlnR IX 


Libya 




CW 


John Brown I "K 


Iran 


Rnglnecrs & 




Construction Ltd 


ov 


Kcnnett Componinis IX 


Syria 




WM 


Leeds &. Northrup Ltd IX 


Iran 




Nuclear 


Metalseal Snulhall IX 


5vrjn 




WM 


Mlllhank Technic;il IX 


Iran 


Services 






/\rms 



DcatrlBllnii 

The us Conuncrce Departmeiu aJle|e< that ibc UK tubtidiuy of this California laser 
and optict equipment manufacturer committed 14 export control violalioni between 
inly 1989 and Feb 1990. includui( anti-lsrael boycon violations and illicit exporu to 
Iran. 

£i;porf Control Newt. Ocl 31. 1992 

Btititta Customs seized SI million worth of jet engine paiu from this company bound 
for Iran in Feb I99J. 
MEED Feb 26. 1993 

Upgrading of mass data storage and alarm system for Iranian benafluoride plant. The 
Irish branch of Leeds &. Northrup is serving as the inlennediary for equipment 
purchased ui the US. |BNF claiou the DoC mistakenly entered this license request m 
the Iran list, whereas the plant was built in Ireland). 

'Weapons of Mais Desiruciion." Simon Wieseruhal Center. August 1992. 

Negotiauons under way to help build a large pharmaceuucals plant near Damascus. 
Glaico will supply process technology for contraceptive pills, heart, and ulcer 
medicines. 

Tender documents /French Embassy weekly economic review. 2 Ocl 19911 

Provided technical assistance and equipment, to help rebuild Iranian weapons plants in 
the early I9g0s. 

DMS Market Intelligence report. 1984. 

Attempted to ship VAX computers from the U.S. to the Syrian Ministry of Interior. 
This company was deeply uivolved in shipping Digital Fx)uipment Corp computers to 
Iraq in the l9g(H. and is controlled by a Jordanian businessman. 

'Weapons of Mass Destruction." Simon Wiesenthai Center. August 1992. 

Main company owned by Ted Silkstone. who hired by Libya to recommission the 
RabU plant in 1990. 

Washington times. Jan 16. 1989 

Freight forwarders for equipment shipped to Rabta plant 

Stem Jan 12. 1989 

Subconuactor to Lurgi on the Qazvin pesticides plant, m a deal estimated at S37 
milUon Its panicipation was blocked in 1989 by the British government after 
intense US pressure wiibui the Australia group. 
Obser\er Feb 4. 1990 

Based in Sonning. this company contracted to supply unidennned equipment to CERS 
in May 1992 

"Weapons of Mass Destruction." Simon Wiesenthai Center. August 1992: 
Mednews 8/17192. 

Computerized trainuig courses for Iranian technicians working in a fluoruie and 
hexariuoride plant (British Nuclear Fuels claims the DoC mistakenly entered this 
license request ui the Iran lisL whereas the plant was buili in Ireland] 

"Weapons of Mass Destruction." Simon Wiesenthai Center August 1992. 

Based in Ashford. this company contracted to supply unidentined equipment to CERS 
in May 1992 

'Weapons ol Mass Destruction,' Simon Wiesenthai Center. August 

100?' l^aWnou/e a/17/09 

Bntish government arms sales entity, established in 1967 and owned by IMS 
Supervised Chieftain sales in late 1970s and maintained spare parts and munitions 
deliveries through the 1980s. 

Independent on Sunday. 22 Nov 1992 






152 



Compint f ouBlrv CltttUfy nticrlpllon 

MW Kellogg Co IIK Iran Contuucuon of • S400 million urea tnd immonit plant in Khoruun province, along 

tbc border with Turkmenulaa. contracted in Jan 1992. Feedtlock from Ihii plant bai 
CW: direct applicauoiu in CW production and. according to company officials, for the 

manufacture of heavy water. 

MEED 21 Feb 1992: Mednews d«A>2 

MW KcllofiK Co IIK Syria In 19992. began eipanding the Homi ammonia-urea planL in conjunction with 

Technip While this is a legitimate civilian facility, both its equipment and the 
CW industrial processes can be used in cheuucal weapons producuon. 

'Weapons ot Mass Destruction. ' Simon Wiesenthal Center. August 

RIdsdale in( Libya Supplied unspeciHed equipment for the Rabia plant 

London Sunday Timgs. 5 Apr J 992. 
WM 

Royal Ordnance llC iron Provided technical assistance and equipmenL to help rebuild Iranian weapons plants in 

the early I980t; supplied ChiefLain tank munitions and equipment for munitions 
WM plant, but said to have ceased activities when pnvatized in 1987 

DM5 Market Intelligence report. 1984: Independent on Sunday. 22 Nov 1992 
Smith Klein I'K Syria Negoliauons under way to help build a large pharmaceuucals plant near Damascus. 

Bcecham Tender documents /French Embassy weekly economic review. 2 Oct 1991] 

CW 

Tosalei Trading I'K I.lb\a Front company set up by Ted Silkstone of Britain, registered in Panama with a Swiss 

mailing address, which received more than 1 million pounds sterling to get the Rabia 
CW steelworks and muniuons plant running ui 1990. 

London Sunday Times. 5 Apr 1992. 

Ihsan Barboull l<K.Cenn^\ I.ib\a Front company, run by Iraqi-bom Ihsan Baibouu. with branches in the UK. Germany. 

International (IBII and the US., served as prune contractor and procurement agent for (he Rabu plant. 101 

CW was also heavily involved in procurement for Iraqi weapons plants. 

Washington limes. Jan 16. 1989 

UN Industrial UN \onh Sponsored project to build a nuclear cyclotron in North Korea in 1992: sponsored a 

Development Korea S2.36 million project in 1989 to purchase a CNC machine-tool plant from the USSR 

Organliation WM Seoul Sin TongA Dec 1990 (FBIS EAS 1/25/91) 

(UNIDO) 

AAT USA Iran Aaempted to supply microwave equipment to the Research and Development Group 

Communications Mednews 6/8/92. 

Corporation WM 

Aero Systems USA Iran Illicit supplies of missiles and military avionics gear, via Hong Kong and Singapore 

Miami-based company, mvestigaled by US Customs: arranged shipment of Vanan 
Arms lubes for Hawk missiles and other equipment, including shipment seized by US 

Customs at JFK m 1988 

Miami Herald. 7/17/91: South Florida Business Journal. 1/29/90. 

Alcnlac USA Iran Supplied 90 tons of thiodiglycol. a mustard gas precursor, in 1987-1988. subsequent 

shipments blocked. 

' ^ Court documents: US customs investigation. 

.\lcnlac USA lr{m Sold 210 tons of Ihiodyglycol to intermediaries in Greece. Germany, and Singapore in 

International 1987-88. who shipped it to Iran for use m mustard gas production Final shipment of 

(*W 120 Ions intercepted by US Customs and replaced with uater. At same time. Atcolac 

was making similar shipments that ended up m Iraq. 
V S Court documents 

Aldrlch Chemical Cii ISA Iran Numerous attempts, still penduig. in 1991 to ship CW precusors including 

phosphorous pentachlonde. to the Atomic Research Organization of Iran 
^"^ "Weapons of Mass Destruction." Simon Wiesenthal Center. August 1992. 



153 



AJlen Corp 



Aoacooda 



Cqupift 
USA 



USA 



Apple Computer USA 



AST Research Idc USA 



Allanllc Digital USA 

Systems & Services 



Ayrcs Corp 



USA 



Ayres Corporalion USA 



Baxter International USA 



BP America 



USA 



Canberra Industries USA 



Canberra Industries USA 



Caspian Computer USA 

Consultants 



Dane Aircraft Inc USA 



DIeilal Fquipment USA 

Corp 



Caleeorv 

Syria 

WM 
Iran 



WM 

Iran 

Nuclear 
Iran 

WM 
Iran 

Nuclear 
Iran 

Anns 

Iran 
CW 

Syria 

CW 
Iran 

CW 



Iran 
Nuclear 

Svria 

Nuclear 
Iran 

MT 
Iran 

;\rms 
Iran 

Nuclear 



Deacrlptlon 

Aoempted to ship small quinuues of electronics test equipment to a Syrian miiilary 
rcscarcb insutute in 1987. 

'WMpMH «f Mmt Orttrmcutm. " Sim»m Wittnih^ Ctaur. Am$uu 2901. 

Supplied equiptncni lo tbe Sarcbeshmeb copper complex being built by Krupp 
Koppen. (Iran needs large quantities of processed copper and brass for (be production 
of utillery sbells). 

MEED 24 Man* 1989 

Supplied compuien wiih Department of Commeice licenses to a research unit at Amir 
Kabir University, associated wiib Iran's nuclear program. 
Mednewi 6/S/92: Business Week 6/17/91 

Supplied computers and communications equipment to tbe Revolutionary Guards' 
primary campus. Shanf University, in 1990 and 1991 
Mednews 6/8/92 

Contracted lo Dor Axgham Limiled in Iran to supply high speed computers. 
Mednews 6/S/92 

This Albany. Ga company, owned by Fred P. Ayres. applied for a license to sell 10 
crop-spraying aircraft worth $7 million in late 1992, which could be used for dumping 
CW Ayres said a follow-on contract could involve hundreds of planes. 

"U.S. May Lei Iran Buy Chemical Plans.~R. Jeffrey SmisK V/P. Ian 5. 1993 

Sought DoC approval id sell 10 cpop-dusting aircraft worth S7 million in late 1992; 
license denied on grounds they could be used for poison gas attacks. Tbe company had 
hoped to sell hundreds of these aircraft lo Iran. 
MEED. Jan. IS. 1993 

Contracted to build a factory to manufacQire intravenous fluids for the Synan Annv; 
partially blocked through intervention by the US. anti-boycott office. 
Simon Wiesenihat Center archives 

The US subsidiary of British Petroleum applied for a license m late 1992 lo sell a SlOO 
milbon acrylonitrile plant used in manufacturing syntheuc fibers, lo Fibchem in 
Iran The Commerce Department favored Ihe sale; but il was denied by the While 
House on Jan. 4. 1992 on the grounds that the process made CW precursor hydrogen 
cyanide as a byproduct. 

"U.S. Ma\- Lei Iran Buy Chemical Plant."R. Jeffre\ Smith. WP. Jan 5 1993: .Vf££D 
Jan 15. 1993 

Aliempiedin 1991 lo ship precision instruments for nuclear engineering department 
of Shanf University, the Revolutionary Guards main nuclear research and procuremcni 
center 

Mednews 6/8/92 

Shipped lecbnical manuals and design uiformation to Synas Aiomic Energy 
Commission in 1987 

"Weapons of Mass Destruction." Simon Wiesenihal Center. August 1992 

Assisted Reza Zandian in technical inspecuon of IBM supercomputers ui Nov 1992. 
purchased for illegal export to Iran. 

OEE qffadavit. 1/93: 

Organued illicit shipments of arms and related technology from 1981-87 Four 
officials from this company pleaded guilty in March 1988. 
South Florida Business News 1/29/90 

A S2 million computer to the pnnciple research and procurement arm of the 
Revoluiionar> Guards, the Shanf Technical Universiiy; other sbipmenis mcluded V,v\ 
computers lor use in oil well logging in Iran, conlracis worth S7 million of mid-rangi.' 
mini computers signed as of June 1991. 
VffrfncH! 6/8/92: Business Week 6/17/91 



154 



Compjnir CouBtrT 

Earlh Obirrrallon USA 

Sslclllu Compsny 



Eulmaa Kodak Co USA 



EalOB Corporation USA 



Calrgorr Dttfrlptloa 

Inm Supplied I w h n iril data for a higb-tecii saullile recaving Mjlion to Matiud 

Davvincjad. deputy miaisia in charge of goverrunenl computer procuremenL The 

HHI gjHk itanoo wai built by GE in Mardabad for tbe National Secisity Af eocy u tbe 

19701. 

Business Week 6/17/91. 



FaltuD 



USA 



FInalRaa Mai USA 



Fluke Inlernalional USA 
Corp 



Clrlndui Corp 



USA 



Syria 



Nuclear 
Syria 

WM 
Inm 



Anm 



Inm 

CW 
Inm 

Iran 



Halcyon DaU 


USA 


Iran 


Communications 




WM 


Hercaire 


USA 


Iran 


lotcrnatlonal Inc 




Anns 


Hewlett Packard 


USA 


Syria 



Hone v»ell 



USA 



Honevwell Bull Inc USA 



IBM 



USA 



WM 

Iran 

Iran 
WM 

Iran 

Nuclear 



Aenal ptootograpby equipotenL supplied to the Atomic Energy Commiuion in 1988. 
Mednewt 5/2l/9i. 

Attempted in 1988 to ship electronic control equipment for machining center* run by 
a Syrian miiilary research iiutitute. 

'Weapons of Mass Desiruaion. " Simon Wiesemhal Center. August 1992. 

Served as procurement front for Iranian purchaaes of military atid civilian aircraft 
spares during U.S. and international embargo ui tbe early 1980s. Used inurmedianes 
including Hercaire International Inc. of Fort Lauderdale. Fla. and exported pam from 
Hong Kong to Fasami Co in Tehran. 

South Flonda Business Newt 1/29^0 

Supplied $684 062 worth of computeii. tome for research on biok>gical compounds 
and oihers for use in oil reflnenet. 
AP 5/14/92 

Electronic lest and calibration equipment for aircraft manufacturing center in Iran. 
Mednewt 6/S/92 

US cbemicai importer and exporter, owned by Girindus SA of Switzerland; negotiated 
purchase of ammonium perchloraie from PaciHc Engineenng. an oxydizer for solid 
fuel baiiisuc missiles. One shipment of of 286.000 pounds was seized 2/88 in 
Rouerdam; an earlier shipment of 40.000 Ibi was seized in Belgium in 1987. 
IHT Monk 29. 1989 

Provided computer diagnostic equipment for digital data transmission circuits to the 
Iranian Research Organization. 
Mednewt 6/8/92 

Served as uiiermediary for sales of spare paru for military and civilian aircraft during 
the inlernalional embargo m the early 1980s. 

South Florida Business News 1/29/90 

Shipped oscilloscopes to the Syrian Atomic Energy Commission in 1987: anempied 
to ship test equpiment for tbe design and devek>pment of quanz oscillators and logic 
signal sources (of use in military radars and telemetry) to a Syrian military research 
institute in 1989. 

'Weapons of Mass Desiruciion." Simon Wiesemhal Center. August 1992. 

Sokl $10 million worth of computers for oil refmenet. replacement parts for 
elecironic assemblies and technical models: shipments may have reached S16 million 
AP Mav 14. 1992: Chicago Tribune 5/14/92 

Sold S5.2 million in computers for a national census project some of which were (o 
be resold by a local distributor Company is a joint venture between Croupe Bull of 
France and NEC Corp of Japan. 

AP 5/14/92 

Sold two IBS ES 9000 computers to computer consultant Ray Amiri in California, who 
attempted to export them illegally to Iran ui 1992 and 1993 One of Ihe computers was 
seized by the Commerce Departments Office of Expot Enforcement in March. A n IBM 
RISC system 6000 was shipped 10 Iran Business Machines in Tehran without a license 
in IWI 

Court documentt. 



155 



CflmBtar 

Imo iDdutlrlet 



Iraa BuslDeai 
Machine! 



Kay Elrmclrlci Corp USA 



Komci International USA 



Leeds & Nonhrup USA 

Systems 



Levbold loflcon (nc USA 



Lucach Corporallon USA 



f""""-v 


Category 


USA 


Iran 




wu 


USA 


Iran 



Mcdport 



USA 



National Veterinary USA 
Services 

NCR Corporation USA 



fan 

NfT 
Inm 

CW 

Iran 
Nuciev 

Iran 
Nuclear 

Iran 
MX 

S\r<a 

rw 

5vria 

CW 

Iran 

WM 



Norstream Inlerlec 


MSA 


Iran 


loc 




WM 


Orient ()>erseas 


USA 


Iran 


Container Line 




CW 


Pacific Rnglneering 


USA 


Iran 


and Production Co 






IPKPCOM 




MT 


Parsons-Jurden 


USA 


Iran 



^•M 



Deicrintlon 

Pvcni company of Wtmn Pumps |qv). Located in Lawienceville, NJ. 
WashiHgiom rimet. 4/20/91 

OwiMd by Rcza Zaadian: shipped an IBM RISC System 6000 supercomputer, model 
520H u> Iran illegally inl99l; auempted to export two additional ES-9000 
tupercomputen illegally to Iran via France in Jan 1993. 

OEE affadiKit. 1/93: lA Timer Jan Sand Jan 10. J 993 
Contracted to sell radio spectrum analyzers to Sharif Univenity in 1989. 

Mednews 6/8/92 

Conspired m 1988-1989 to sell SOD MK 94 bombs, each packed with 108 pounds of 
sarin, tod 500 MK 116 'Weieye' bombs, each packed with 347 J pounds of the nerve 
agenL with Charles Caplan. Owner Juwhan W. Yun indicted after Customs 
investigation 

U.S. Conn documcmu 

Test equipmeni for dau monitoring and bulk storage for a fluorine and hexafluotide 
plant begun in 1986. This 1990 shipment was approved by the Department of 
Commerce. [British Nuclear Fuels says that the DoC miitakenly entered this license 
request in the Iran list, whereas the plant was built in Ireland). 

'WtapoKS of Mass Desiruciion." Simon Witsenihal Center. August 1992. 

Contracted in 1990 to sell gas chromatograpby and analysis equipment to the plasma 
physics laboratory of Shanf University, the Revolutionary Guards main nuclear 
research and procurement center. Also contracted to sell precision measuring 
equipment u> Shanf University. 
Mednews 6/S/92 

Owned by Reia Zandian: shipped an IBM RISC System 6000 supercomputer, model 
520H to Iran illegally inl991; attempted to export two additional ES-9000 
supercomputers illegally to Iran via France in Jan 1993. 
OEE i^adavit. im: LA Tunes Jan 5 and Jan 10. 1993 

This small. Amhurts. Ohio company offered in 1991 to lake on the Baxter contract in 
Syria, following the intervention of the U.S. anti-boycott ofRce. 

Simon Wiesenshal Center archives 
Supplied bacteria and protozoa under DoC license in 1988. 

'Weapons of Mass Destruction.' Simon Wiesenlhal Center. August 1992. 

SuppUed Unix-based compulen. software, and electronics test equipment to state-run 
universiues and research enuues associated with the Ministry of Defense and the 
atomic energy organizauon. 

Mednews 6/S/92 

Radio spectrum analyzers, lest equipment, and computer manufacturing equipment to 
Iran Electronics Industries 

Mednews 6/8/92 
Shipping agent for Patron and Alcolac for thitxlyglycol sbipmenis purchased by Iran 
V S- Court documents 

Manuiacmred large quamiues of ammonium perchlorate which purchased by Iran 
ihrougb inicrmediancs ui Switzerland and the US 
IHT March 29. 1989 

Supplied equipment to the Saicbcshmeb copper complex being built by Krupp 
Koppers i Iran needs large quaniilies of processed copper and brass for the producuon 
of artillery shells) 

l/E£D :■* March 1989 



156 



Compinv Countft 

Palron Strvlc«». Inc USA 



PcrklB KImcr USA 



Ptrkin Klmcr USA 

Corporation 

Reactor Kipcrlmcnti USA 
Inc 



Rockwdl USA 

iDlcrnallonal 



Rolm Corp 



Ttklrnnix 



USA 



Sabre Foundation USA 



Salelllle USA 

Technology 

Management Inc 



Sclenliric Atlanta USA 



Tecnnlcon USA 

Instruments C'urp 



USA 



Teklroni>. Inc USA 



Terrin Vssoclales USA 



Category Hescrlntlon 

Iran Ficigbi forwarding ageni for Alcolac for ibiodyglycol thipmcnu purcbaied by Iran. 

U.S. Coun documents 
CW 

Syria Shipped chemical analysis and electronic equipment to tbe Syrian Atomic Energy 

Commission in 1987 
Nuclear 'Wrapons of Mast Detiruciion. " Simon Wiesetahal Center. August 1992. 

Iran Attempted shipmenu of chemical and mineral analysis equipmeni to the Alomic 

Energy Oganiuuon of Iran (license applications rejected). 
Nuclear Mtdnt^t 6/IW7: DNA IrUemational Trade Daily &/(t/92 

Iran Licenses pending in 1991 to ship neutron shields lo the Alomic Energy Organization 

of Iran 
Nuclear Medmews. 6/8/92 

Iran Gyroscopes, avionics, and communications gear for helicopter repair: S54O,0O0 in 

transmission gear and helicopter navigation equipment. 
*M Medntws 6/8^2. AP. 5/14/92 

S\ria Attempted lo ship advanced digital communications sv^itching gear to a Syrian 

military research institute in 1987 

*^ "Weapons of Mass Desimciion." Simon Wiesemhal Center. August 1992. 

Libya This Santa Barbara. CA company helped build missile lest facilities for the Olrag 

group in the late 1970s 

^n* Geerd Greune. "Bundesdeutsche Raketen in Zentralt^rika " 

Iran Contracted to sell satellite ground stations to Iran in 1991. After an export license 

request was denied, the company attempted (o ship SI. 4 million worth of Very Small 
NfT Aperture Terminal (VSAT) teinunals and related equipment that was seized by US 

marshals in May 1993. its largest customer. Philippines Long distance Telephone Co. 

ordered a S6 million digiul switching network in Jan. 1992. which may have been 

re-exported lo Iran. 
M Times 5/20/9) 

Iran Coniracied to sell spare paru for microwave and satellite communications systems in 

1991. 
^■M Mednew, 5/31/93 

Iran I arge quanuiies of blood chemistry analytical equipment, capable of analyzing CW 

agents 
C^ Mednews 6/6/92 

S\na Atlempied lo ship CAD/COM equipment to a Syrian military research institutes in 

19X7 198K. and 1989 
^^ Wrapons of Mass Desiruciion." Simon Wiesemhal Center. August 1992 

lain Numerous attempts to sell oscilloscopes and test equipmeni to various military 

end users in Iran rejected by tbe DoC. One license for eleclronic tesl equipmeni 
WM approved for sale lo ihe Defense Industnes Organization. 

Mednews 6/n/92 

Iritn Provided <ipare parts, service, and navigation equipmeni to nuclear end-users in Iran. 

wiih I'kpartmcni of Commerce approval; attempted lo ship more than S2 million 
v^"\t worth of radio spectrum analyzers, oscilloscopes and other precision instruments lo 

known mililary end-users i ncluding the Gbods Research Center, a part of the Iranian 

Ministry of Defense Other shipmenu of electronics and manufacturing assemblies lo 

Minisuy of Defense manufacturing plants. 
Mednews fi/K/92 



157 



CompanY Country 

VarUD Asiociates USA 



VSAT Svslemt loc USA 



Warren Pumpi lac USA 



Wild MagQarox USA 

Satellite Survey 



Dubno Nuclear USSR 

Research Imlltule 



Dvuna laitltute USSR 



ELPA (Small Size USSR 

Electric Motors 
Factory) 

Gorky Machine Tool USSR 
Factory 



lnleralotnenerf;o USSR 

Soclet y 



Category 

/nzn 

Nuclear 



Iran 

WM 
Iran 

WM 
Irxm 

Nonh 
Korea 
Nuclear 

Nonh 
Korta 
Nuclear 

Nonh 
Korea 

Nuclear 

Nonh 
Korea 
WM 

Nonh 
Korea 
Nuclear 



EnerKOinvest Yugoslavia Libva 



CW 



Deicrlplloil 

Applied to sell $J9 millioa worth of licenied goodi to various Iranian mililaiy 
procurement fronts, ixKluding direct tales to the Atomic Energy Organization, and 
debvered gas ctiromatop-apl^ systems, osciUoscopcs, and radio spectrum analyzers: 
Variao tubes seized at JFK airport on Nov. 6, 1988 bound for Iran. 

Mediwws 6/S/92: 2/I8/9I. 

This San Jose. Ca company is i joint venture with CEIEC of Chin*, which is 
supplying radars and maaufacuiiing equipoienl to Inn, 
Mednrws 11/25/91 

Located in Wtiren. Mass. this division of Imo Industries Inc. sold special pumps to 
Iranian MoD worth $136,000. which could be used for manufacture of explosives. 
Commerce told them tbey did not need a license. 
WasmifioH Timts. 4/20/91 

Suppbcd spare parts for satellite mapping equipment, sold by Swiss parent company. 
WUd Hccrbrugg 

Mednews 6/8/92 

Sponsored nuclear exchanges between the USSR. Czechoslovakia, and North Korea in 
the late 19gOs. 

Prague CTK iit Engluh 6/29/93 (JPRS Prolifenaion Issues 7/7/92) 

Trained 30 North Korea nuclear engineeii yearly as a result from North Korean-Soviet 
cooperauon agreemenu. 

Seoul Singdong-A. Aug 1990 (FBIS East Asia. 10/15/90) 

Trained North Korea technicians starting in August 1979 in producion techniques of 
ultra-small elecmc motors. 

Seoul Sin TongA Dec. 1990 (FBIS EAS 1/25/91) 

Signed a cooperation agreement with the Huichon Machine Tool Factory in North 
Korea in ScpL 1987. to transfer machioe-iool manufacturing technology. 
Seoul Sin TongA Dec. 1990 (FBIS EAS 1/25/91) 

Sponsored nuclear eichanges between the USSR. Czechoslovakia, and North Korea in 
the late 1980$. 

Prague CTK in English 6/29/93 (JPRS Proliferation Issues 7/7/92; 

Power substation for Rabta plant 

Washington times. Jan 16. 1989 



158 



19?3 U.S. Total Exports of Selected Conmoditles to Iran 



Code 



Description 



Quantity Unit 



Value 



Licence 



•* Month: January 

J002905050 TOXUS, CULTURES Of MICRC-ORGAMIS^'S AND SIM PROO 

8101930000 TUNGSTEN WIRE 

84*n28000 TURBO. ET TURBINES, EXC A/C, THRUST EXCEEDING 25 KH 

84''.8090C0 AIR OR VACUUM PUMPS, NESOI 

8419600000 MACHINERY FOR LIQUEFTINC AIR OR OTHER CASES 

8421190COO CEN-RlfUGES, NESOl 

8421910000 PARTS OF CENTRIFUGES, INCLUDING CENTRIFUGAL DRYERS 

8466100070 TOOL HOLDERS AND SELF-OPENING OIEHEAOS, NESOI 

8471200030 DIGITAL ADP MCM U CPU i INPUT/OUTPUT UNT, COLOR CRT 

8471200030 DIGITAL ADP MCH U CPU i INPUT/OUTPUT UNT, COLOR CRT 

847120C030 DIGITAL ADP MCH W CPU t INPUT/OUTPUT UNT, COLOR CRT 

847120C060 DIGITAL ADP MCH W CPU L INPUT/OUTPUT, CRT EXC COLOR 

847120C060 DIGITAL ADP MCH U CPU i INPUT/OUTPUT , CRT EXC COLOR 

8471200060 DIGITAL ADP MCH U CPU I INPUT/OUTPUT, CRT EXC COLOR 

8471200C60 DIGITAL AOP MCH U CPU t INPUT/OUTPUT, CRT EXC COLOR 

8471200060 DIGITAL ADP MCH U CPU i INPUT/OUTPUT, CRT EXC COLOR 

84712C0060 DIGITAL AOP MCH U CPU t INPUT/OUTPUT, CRT EXC COLOR 

8471200060 DIGITAL ADP MCH U CPU t INPUT/OUTPUT, CRT EXC COLOR 

847".200090 DIGITAL ADP MCH W CPU S INPUT/OUTPUT UNT, U/0 CRT 

8471200090 DIGITAL AOP MCH W CPU i INPUT/OUTPUT UNT, W/0 CRT 

8471200C90 DIGITAL ADP HCH W CPU t INPUT/OUTPUT UNT, U/0 CRT 

8471200C90 DIGITAL ADP MCH U CPU I INPUT/OUTPUT UNT, W/0 CRT 

8471200090 DIGITAL ADP MCH W CPU i INPUT/OUTPUT UNT, W/0 CRT 

847120CC90 DIGITAL ADP MCH W CPU i INPUT/OUTPOT UNT, W/0 CRT 

84712C0090 DIGITAL ADP MCH W CPU i INPUT/OUTPUT UNT, W/0 CRT 

9014900000 PTS, FOR DIRECT FIND COMPASSES, NAVIGATIONAL INST 

9027304080 ELEC SPECTROMETERS t SPECTROCRAP-S ETC., OPT RACTN 

•• Subtotal *• 



X 


11000 


CDEST 


13 KG 


10125 


CDEST 


1 NO 


14J428 


GDEST 


X 


9172 


GDEST2 


3 NO 


23820 


GDESTIN 


2 NO 


11260 


GDEST 


X 


5926 


GOEST 


X 


2577 


GOEST 


13 NO 


47170 


GOEST 


9 NO 


32000 


D161419 


S NO 


19195 


D161419 


12 NO 


42261 


GDEST 


17 NO 


22644 




S NO 


18744 




21 NO 


46200 




21 NO 


31205 


G0EST68 


3 NO 


21158 


G0EST6 


4 NO 


12432 




1 NO 


2695 


GDEST 


12 NO 


38590 


GOEST 


10 NO 


33737 


GOEST 


4 NO 


14600 


GOEST 


2 NO 


7112 


GOEST 


17 NO 


56674 


GOEST 


1 NO 


3500 


GDEST 


X 


32498 




1 NO 


15340 


GOEST 



177 



715063 



*• Month: February 

3602000060 PREPARED EXPLOSIVES, EXC PROPELLANT POWDERS, NESOI 

8421390040 GAS SEPARATION ECUIPMENT 

84292C00C0 GRADERS AND LEVELERS, SELF-PROPELLED 

e429203CC0 GRADERS AND LEVELERS, SELF-PROPELLED 

8429200C00 GRADERS AND LEVELERS, SELF-PROPELLED 

8429200000 C^AOESS AND LEVELERS, SELF-PROPELLED 

8429200C00 C5ADERS AND LEVElERS, SELF-PROPELLED 

8429200000 GRADERS AND LEVELERS, SELF-PROPELLED 

8429200CC0 GRADERS AND LEVELERS, SELF-PROPELLED 

8429200CO0 GRADERS AND LEVELERS, SELF-PRCPELLEO 

8429200000 GRADERS AND LEVELERS, SELF-PROPELLED 

8429200000 GRADERS AND LEVELERS, SELF-PROPELLED 

8429200000 GRADERS AND LEVELERS, SELF-PROPELLED 

B42920CCjO GRiSERS AND LEVELERS, SELF-PROPELLED 

e4292CD0C0 GSAJtRS AND LEVELERS, SELF-PROPELLED 

842?2:C00C G'a::JS and LEVELERS, SELF -PRC^ELLED 



117 KG 
3 NO 
1 NO 
1 NO 
1 NO 
1 NO 
1 NO 
1 NO 
1 NO 
1 NO 
1 NO 
1 NO 
1 NO 
1 NO 
1 NO 
1 NO 



8669 


EXPD132016EX 


152000 




119204 


GOEST 


119204 


GOEST 


119204 


GDEST 


119204 


GDEST 


119204 


GOEST 


119204 


GOEST 


119204 


GOEST 


119204 


GOEST 


119204 


CDEST 


119204 


GOEST 


119205 


GDEST 


119204 


GDEST 


119204 


GOEST 


119205 


CDEST 



159 



199J U.S. Total Exports o< Selected Contnodities to Iran 



Code 



Description 



Quantity Unit 



Value 



Licence 



8429200000 
84292000CC 
8A29200OC0 
84292000C3 
84292000C0 
8429200000 
84292CC030 
842^200000 
84??20COO0 
8429200000 
842920C000 
8429200000 
8429200000 
8429200000 
8429200000 
8429200000 
84292C000C 
8429200000 
84292000C0 
8429200000 
8429200C00 
8429200000 
8429200000 
8429200CO0 
8429200000 
8429200000 
8429200000 
8429200000 
84292000C0 
84292000CO 
8429200000 
84292O00C0 
8429200000 
8429200000 
8429200000 
842^200000 
642920000C 
84292000CC 
8429200000 
8429200000 
84292000C3 
8429200003 
8429200003 
8429200000 
8429200000 
8429200C03 
84292C30C3 
8429200C30 



GRADERS AND 
CRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRACERS AND 
GRACERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRACERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 
GRADERS AND 



LEVELERS, 


SELf- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVElERS, 


SELF- 


LEVELERS, 


SELF- 


LEVElERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS. 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVE.ERS, 


SELF- 


LEVELERS, 


self- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVELERS, 


SELF- 


LEVElERS 


SELF- 


LEVELERS, 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELf- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


SELF- 


LEVELERS 


, SELF- 


LEVELERS 


, SELF- 



-PROPELLED 
-PROPELLED 
-PROPELLED 
-PROPELLED 
-PROPELLED 
-PROPELLED 
-PROPELLED 
-PROPELLED 
-PROPELLED 
-PROPELLED 
-PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
-PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
•PROPELLED 
■PROPELLED 
•PROPELLED 
■PROPELLED 
•PROPELLED 
■PROPELLED 



NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
HO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 



119205 


GOEST 


119204 


COEST 


119204 


GOEST 


119204 


GOEST 


119204 


GOEST 


119204 


GOEST 


119205 


GDEST 


119204 


CD EST 


119205 


GOEST 


119204 


GOEST 


1192C4 


GOEST 


119204 


GDEST 


119204 


GOEST 


119205 


GOEST 


119204 


GOEST 


119204 


COEST 


119204 


GOEST 


119204 


COEST 


119204 


GOEST 


119204 


COEST 


119204 


COEST 


119204 


CCEST 


119205 


COEST 


119204 


GOEST 


119205 


COEST 


119204 


COEST 


119204 


COEST 


119205 


COEST 


119204 


GDEST 


119204 


GOEST 


119204 


GDEST 


119204 


GDEST 


119204 


GDEST 


119204 


GDEST 


119204 


COEST 


119204 


COEST 


1192C4 


GOEST 


119204 


GDEST 


119204 


COEST 


119204 


COEST 


119205 


GOEST 


119204 


GOEST 


119204 


GDEST 


119204 


GOEST 


119204 


GOEST 


119204 


COEST 


119204 


GOEST 


1192C4 


GOEST 



160 



1993 U.S. Total Exports of Selected Coffnodltles to Iran 



Code Oescrfption 



8429200000 GRADERS ANO LEVELERS, SELf -PRCPELLED 

8429200000 GRADERS AND LEVELERS, SELf -PROPELLED 

8462910030 HYORALLIC PRESSES, METAL FORMING, USED OR REBUILT 

8462910090 HYDRAULIC PRESSES, METAL FORMING, EXCEPT N/C, NEW 

8471200030 DIGITAL AOP MCH W CPU I INPUT/OUTPUT UNT, COLOR CRT 

8471200060 DIGITAL ADP MCH U CPU t INPUT/OUTPUT, CRT EXC COLOR 

8471200090 DIGITAL ADP MCH W CPU t INPUT/OUTPUT UNT, U/0 CRT 

8471200090 DIGITAL ADP MCH W CPU i INPUT/OUTPUT UNT, U/O CRT 

8471200090 DIGITAL ADP MCH U CPU t INPUT/OUTPUT UNT, U/O CRT 

8471200090 DIGITAL ADP MCH U CPU t INPUT/OUTPUT UNT, W/0 CRT 

8471200090 DIGITAL ADP MCH U CPU t INPUT/OUTPUT UNT, W/0 CRT 

8471200090 DIGITAL AOP MCH W CPU t INPUT/OUIPUT UNT, W/0 CRT 

8471200090 DIGITAL ADP MCH U CPU i INPUT/OUTPUT UNT, W/0 CRT 

8705900000 SPECIAL PURPOSE VEHICLES, NESOI 

8716100075 TRAILERS AND SEMI-TRAILERS FOR HOUSING 10. 6M, MORE 

9027304040 SPECTROPHOTOMETERS USING OPTICAL RAO NONELECTRICAL 

9030100000 INST FOR MEASURING/DETECTING IONIZING RADIATIONS 

•• SubtofBl •• 



** Month: March 

3002905050 TOXINS, CULTURES OF MICRO-ORGANISMS AND SIM PROO 

3602000050 DYNAMITE IN CARTRIDGES SUITABLE FOR BLASTING 

3602000050 DYNAMITE IN CARTRIDGES SUITABLE FOR BLASTING 

3603000000 SAFETY FUSES, DETONATING FUSE, PERCUSSION CAPS ETC 

8411128000 TURBOJET TURBINES, EXC A/C, THRUST EXCEEDING 25 KN 

8426410090 LIFTING MACHINERY, SELF-PROPELLED, ON TIRES, NESOI 

8429521050 EXCAVATORS WITH 360 REVOL SUPERSTRUCTURE, NEW, REBLT 

8471200030 DIGITAL ADP MCH W CPU & INPUT/OUTPUT UNT, COLOR CRT 

8471200030 DIGITAL ADP MCH U CPU & INPUT/OUTPUT UNT, COLOR CRT 

8471200030 DIGITAL ADP MCH W CPU t INPUT/OUTPUT UNT, COLOR CRT 

8471200060 DIGITAL ADP MCH W CPU t INPUT /OUTPUT, CRT EXC COLOR 

8471200060 DIGITAL ADP MCH W CPU t INPUT/OUTPUT , CRT EXC COLOR 

8471200060 DIGITAL ADP MCH W CPU t INPUl/OUTPUT,CRT EXC COLOR 

8471200090 DIGITAL ADP MCH W CPU S INP'JT/OUTPUT UNT, W/0 CRT 

8471200090 DIGITAL ADP MCH W CPU L INPUT/OUTPUT UNT, W/0 CRT 

8471200090 DIGITAL ADP MCH W CPU i INPUT/OUTPUT UNT, W/0 CRT 

847120009D DIGITAL ADP MCH U CPU t INPUT/OUTPUT UNT, W/0 CRT 

8471200090 DIGITAL ADP MCH W CPU i INPUT/OUTPUT UNT, W/O CRT 

847120C090 DIGITAL ADP MCH W CPU i INPUT/OUTPUT UNT, W/0 CRT 

8471200090 DIGITAL AOP MCH W CPU t INPUT/OU'PUT UNT, W/0 CRT 

847120009C DIGITAL ADP MCH W CPU t INPUT/OUTPUT UNT, W/0 CRT 

847120009C DIGITAL ADP MCh U CPU t INPUT/OUTPUT UNT, U/O CRT 

8502300000 GEKERA-ING SETS, ELC, NESOI 

8705900000 SPECIAL PURPOSE VEHICLES, NESOI 

9027304040 SPECTROPHOTOMETERS USING OPTICAL RAO NONELECTRICAL 



Quantity Unit 


Value 


Licence 


1 MO 


119205 


GDEST 


1 NO 


119204 


GOEST 


1 NO 


291429 


GDEST 


1 NO 


2874000 


GDEST 


S HO 


17290 


GOEST 


1 NO 


3412 


2C-0EST 


7 NO 


24579 


GFEST 


1 MO 


907500 


GOEST 


4 MO 


11962 


GDEST 


2 NO 


5978 


GOEST 


9 NO 


29152 


GOEST 


2 NO 


5330" 


GOEST 


4 NO 


11733 


GDEST 


1 NO 


531492 


GDEST 


2 NO 


480000 


DGEST 


5 NO 


12983 


GOEST 


7 NO 


7990 


GDEST 


236 


13004564 




X 


11050 


GDEST 


698 KG 


39588 


D132016 


36 KG 


2700 


GDEST 


296 THS 


28145 


GDEST 


8 MO 


55600 


GDEST 


1 MO 


103851 


DGEST 


6 MO 


108150 


DGEST 


10 MO 


33585 


GOEST 


1 MO 


3600 


GDEST 


1 NO 


3795 


4 


7 NO 


23400 


GOEST 


14 NO 


48500 


GOEST 


6 NO 


19858 


GOEST 


3 NO 


9609 


GOEST 


4 NO 


14699 


GOEST 


1 MO 


2772 


GDEST 


6 NO 


19520 


GDEST 


1 NO 


101580 


CDESTGTDUCNN 


14 NO 


47525 


GOEST 


4 NO 


11900 


GOEST 


2 NO 


5844 


GDEST 


23 NO 


76040 




4 NO 


49492723 


GDEST 


2 NO 


104450 


GDEST 


22 NO 


55454 


GDEST 



161 



19?3 U.S. total Exports of Selected Contnodities to Iran 



Code 



902r304W0 
9027304W0 
902r304C43 
9027304C83 
902^04080 
90273C808C 
90301000OC 
•• Si-ttot«l 



Description 



SPECTROPHOTOMETERS USING OPTICAL RAD NONELECTRICAL 
SPECTRCPHOTOMETESS USING OPTICAL RAO NONELECTRICAL 
SPECTROPHOTOMETERS USING OPTICAL RAO NONELECTRICAL 
ELEC SPECTROMETERS t SPECTROGRAPHS ETC., OPT RAOTN 
ELEC SPECTROMETERS i SPECTROGRAPHS ETC., OPT RAOTN 
SPECTROMETERS & SPECTROGRAPH, OPT RAD,N0N£LEC,NES01 
INST FOR MEASURING/DETECTING IONIZING RADIATIONS 



Ouantlty Unit 


Value 


Licence 


5 m 


12820 


GDEST 


1 NO 


5350 


GDEST 


2 NO 


5534 


GOEST 


46 NO 


170000 




1 NO 


4715 


GOEST 


88 NO 


90169 


GDESTGTOU 


1 MO 


6275 


GOEST 



1314 



50718801 



•* Month; April 

8413702090 CENTRIFUGAL PUMPS FOR LIQUIDS, NESOI 

8417800000 IND OR LAB FURNACES t OVENS, INC INCIN,N/ELE, NESOI 

8417900000 PARTS OF IND OR LAS FURN t OVEN, INCINERAT, NONELEC 

8425410090 LIFTING MACHINERY, SELF-PROPELLEO, ON TIRES, NESOI 

8471200C30 DIGITAL ADP HCH W CPU ( INPUT/OUTPUT UNT, COLOR CRT 

8471200C60 DIGITAL ACP MCH W CPU i INPUT/OUTPUT , CRT EXC COLOR 

8471200C60 DIGITAL ADP MCH U CPU I INPUT/OUTPUT, CRT EXC COLOR 

847120CC60 DIGITAL ADP MCH U CPU t INPUT/OUTPUT, CRT EXC COLOR 

847120CO90 DIGITAL ADP HCH U CPU L INPUT/OUTPUT UNT, W/0 CRT 

8471200090 DIGITAL ADP MCH U CPU t INPUT/OUTPUT UNT, W/0 CRT 

8471200090 DIGITAL ADP MCH U CPU I INPUT/OUTPUT UNT, U/0 CRT 

8471200090 DIGITAL ADP MCH U CPU t INPUT/OUTPUT UNT, W/0 CRT 

8471200C90 DIGITAL ADP MCH W CPU I INPUT/OUTPUT UNT, W/0 CRT 

8471200C90 DIGITAL ADP MCH W CPU i INPUT/OUTPUT UNT, W/0 CRT 

847120C090 DIGITAL ADP MCH U CPU t INPUT/OUTPUT UNT, W/0 CRT 

8471200090 DIGITAL ADP MCf U CPU » INPUT/OUTPUT UNT, W/0 CRT 

902730404C SPECTROPHOTOMETERS USING OPTICAL RAD NONELECTRICAL 

9C273C40SC ELEC SPECTROMETERS i SPECTROGRAPHS ETC., OPT RADTN 

9C273C8O80 SPECTROMETERS i SPECTROGRAPH, OPT RAD, NONElEC, NESOI 

•• Subtotal •* 



6 NO 


(,nzT 


GOEST 


1 NO 


9775 


GDEST 


X 


21216 


2G-DEST 


1 NO 


108517 


OGEST 


9 NO 


32520 


GLV 


18 NO 


62754 


GDEST125 


1 NO 


3822 


GDEST 


41 NO 


145155 




1 NO 


6500 


GOEST 


1 NO 


15000 


GOEST 


1 NO 


7750 


GOEST 


11 NO 


36475 


GOEST 


1 NO 


9750 


GOEST 


1 NO 


5650 


GOEST 


1 NO 


7750 


GOEST 


1 NO 


7750 


GOEST 


3 NO 


9775 


GOEST 


10 NO 


128239 


GOEST 


6 NO 


18050 


GOEST 



114 



675675 



*• Month: May 

2710003D8C OTxER LUBRICATING OILS (EXCEPT GREASES) 

8207125000 OTH£S ROCK DRILLING OR EARTH BORING TOOLS t PARTS 

8411828000 GAS TURBINE ENG.EXC A/C, NESOI, POWER EXCEED 5,000lC 

84118280CO OAS TURBINE ENG.EXC A/C, NESOI, POWER EXCEED 5,00CIC 

84141000GO VACU'-H PUMPS 

84663C30CD MACHINES AS SPECIAL ATTACHMENTS FOR MAC-INE TOOLS 

84669330CO PARTS OF METALWCRKING MACH TOOLS FOR CUTTING GEARS 

8471200030 DIGITAL ADP MCH W CPU I UPJT/OUTPUT UNT, COLOR CRT 

847120OC60 DIGITAL ADP MCH W CPU i INPUT/OUTPUT, CRT EXC COLOR 

8471200C60 DIGITAL ADP MCH U CPU t INPUT/OUTPUT, CRT EXC COLOR 

8471200C90 DIGITAL ADP HCH U CPU t INPUT/OUTPUT UNT, W/0 CRT 

8471200090 DIGITAL ADP MCH U CPU t, IN'uT/OUTPuT UNT, W/0 CRT 

8479906070 PARTS 0' HACH F PROO t ASSEM OF SEMICONDUCTORS 

9C273C4080 ELEC SPECTRQHEIERS t SPECTROGRAPHS ETC., OPT RADTN 



100 88L 


36084 


DGEST 


X 


14100 


GOEST 


1 NO 


37500000 


GOEST 


2 NO 


75000000 


GDEST 


25 NO 


7083 


GDEST 


X 


75000 


GDEST 


177 KG 


9259 


GDEST 


6 NO 


19610 


GLV 


70 NO 


105000 


GDEST 


12 NO 


43685 


GDEST64 


12 NO 


52028 


IVLD 167882 


17 NO 


40030 


GOEST 


X 


14190 


GDEST3 


17 NO 


30500 


GDESTGTOU 



162 



1995 U.S. Tote( Exports of Selected Comnodities to Iran 



Code 



Oescrlpi ion 



9027304080 ELEC SPECTROMETERS t SPECTROGRAPHS ETC., OPT RADTN 
9027304080 ELEC SPECTROMETERS & SPECTROGRAPHS ETC., OPT RADTN 
9027308080 SPECTROMETERS ( SPECTROGRAPH, OPT RAD, WONELEC.NESOI 
9030100000 INST FOR MEASURING/DETECTING IONIZING RADIATIONS 
*• Subtotal •• 



•• Month: June 
8414809000 
8421390040 
8466933000 
8471200090 
9027304040 
9027304080 
9027304080 
9027304080 
9027308020 
9030100000 
9030200000 

•• Subtotal •• 

•*• Total ••• 



AIR OR VACUUM PUMPS, NESOI 
GAS SEPARATION EQUIPMENT 

PARTS OF METALUGRICING HACM TOOLS FOR CUTTING GEARS 
DIGITAL AOP MCH U CPU t INPUT/OUTPUT UNT, U/0 CRT 
SPECTRCPHCTOMETERS USING OPTICAL RAD NONELECTRICAL 
ELEC SPECTROMETERS & SPECTROGRAPHS ETC., OPT RADTN 
ELEC SPECTROMETERS & SPECTROGRAPHS ETC., OPT RADTN 
ELEC SPECTROMETERS I SPECTROGRAPHS ETC., OPT RADTN 
SPECTROSCOPES USING OPTICAL RADIATIONS, NONELEC 
INST FOR MEASURING/DETECTING IONIZING RADIATIONS 
CATHOOE-RAY OSCI LLOSCOPESiCATHOOE-RAY OSCILLOGRAPH 



Quantity Unit 


Value 


Ltcen 


1 NO 


3451 


GOEST 


1 NO 


16258 


CDEit 


1 NO 


8864 


GOEST 


1 NO 


5170 


SDEST 


443 


112978312 




OX 


6755 


GDEST 


3 NO 


152000 




5S KG 


6746 


GOEST 


14 NO 


45400 


GOEST 


1 NO 


3119 


GOEST 


2 NO 


54510 


GOEST 


1 NO 


35600 


GOEST 


18 NO 


65350 


GOEST 


1 NO 


25835 


GOEST 


1 NO 


173818 


OGEST 


1 NO 


8500 


GOEST 


97 


575611 
178668028 





163 



Exports to Iran from OECD Countries 1989-1992 
(millions of US Dollars) 

Source: OECD Monthly statistics 

Compiled by the Subcommittee on International Security, 

IntemalionaJ Organizations and Human Rights 



Country 


1989 


1990 


1991 


1992 


1993 (6 


Germany 


112.1 


218.2 


4,065.6 


5,102.4 




Japan 


76.9 


134.8 


2,473.2 


2,650.8 




Italy 


48.9 


97.8 


1,828.8 


2,047.2 




Great Britain 














35.1 


56.9 


902.4 


1,005.6 




France 














29.5 


49.7 


892.8 


746.4 




United States 














5.0 


13.9 


526.8 


747.6 


362.8 



164 



TRADE WITH IRAN 
OFFICE OF THE NEAR EAST, DECEMBER 1992 

U.S. Trade Sanctions 

Federal government controls currently in place on UJS. trade with Iran were initi- 
ated in January 1984, when Iran was designated a state supporting international 
terrorism. Under the authority of the Export Administration Act of 1979, foreign 
policy export controls were imposed on Iran to cover items such as: aircraft, heli- 
copters and related parts and components; marine outboard engines; chemical weap- 
ons; crime control items; and all goods and technical data subject to national secu- 
rity controls if destined to a military end-user or for military end-use. 

As a result of the Iran-Iraq Non-Proliferation Act passed by Congress and signed 
by the President on October 23, 1992, all goods exported to Iran that require a vali- 
dated export license will be subject on application to a policy of denial. This does 
not affect general license goods. 

EXPORT CONTROLS 

Specific items which will be subject on application to a policy of denial: 

All national security items 

All CBW proliferation items 

All missile technology items 

All nuclear control items 

All military-related items 

Crime control and detection equipment 

Aircraft, including helicopters, engines and parts 

Heavy duty on-highway tractors 

Off-highway wheeled tractors (over tons) 

Cryptographic, cryptoanalytic, and cryptologic equipment 

Navigation, direction finding and radar equipment 

Electronic test equipment 

Mobile communications equipment 

Acoustic underwater detection equipment 

Vessels and boats (including inflatable boats) 

Underwater photographic equipment 

Submersible systems 

CNC Machine tools 

Vibration test equipment 

Certain digital computers (over 6 MTOPS) 

Certain telecommunications transmission equipment (including packet switches) 

Certain microprocessors (clock speed over 25 MHZ) 

Certain semiconductor manufacturing equipment 

Software specially designed for CAD/CAM IC production 

Software specially designed for air traffic control applications 

Gravity meters (static accuracy less than 100 microgal or with quartz element) 

Certain magnetometers with sensitivity less than 1.0 NT RMS per root hertz 

Certain fluorocarbon compounds for cooling fluids for radar and superconductors 

High strength organic and inorganic fibers 

Certain machines for gear cutting up to 1.25 meters 

Certain aircraft skin and spar milling machines 

Certain manual dimensional inspection machines (linear positioning accuracy 
plus/minus 3 1/300) 

Robots employing feedback information in real time 

Large diesel engines 

Portable electric power generators 

Scuba gear and pressurized aircraft breathing equipment 
A general policy of denial applies to items which would contribute to nuclear, 
chemical/biological weapons (CBW), or missile programs; aircraft-related items; and 
items first controlled in 1987 for foreign policy reasons. 

License applications for other items controlled for foreign policy reasons will carry 
a presumption of denial for military end-users and end-uses. 

Further information regarding U.S. export controls on Iran, as well as U.S. export 
licensing policy as it applies to a spjecific product or service, is available from the 
Commerce Department's Bureau of Export Administration at (202) 482-4811. 



165 



IMPORT CONTROLS 

The importation of Iranian goods and services was prohibited by Executive Order 
12613 of October 27, 1987. 

In February 1991, the United States and Iran concluded a bilateral agreement al- 
lowing for a very limited lifting of the embargo on imports. The agreement permits 
the case by case licensing of Iranian-origin petroleum imports if related to resolution 
or settlement of before the Iran-U.S. Claims Tribunal in The Hague or if the pro- 
ceeds are to be otherwise deposited in the Tribunal's security account. 

Additionally, Iranian publications intended for the news purposes may be im- 
ported, and mail may be received from Iran. 

Further information concerning U.S. import controls on Iran is available from the 
Treasury Department's Office of Foreign Assets Control at (202) 622-2520. 

State Department Travel Advisory 

The U.S. Department of State continues to advise U.S. citizens to avoid travel to 
Iran. Since the advent of a cease fire between Iran and Iraq in 1988, wartume condi- 
tions no longer prevail in Iran. 

Despite this, tension between the two countries continues. Travel to Iran also con- 
tinues to be dangerous because of the often anti-American policies of the Iranian 
Government. In the past, American citizens and other foreign nationals have been 
arbitrarily arrested, detained, or harassed by Iranian authorities. Moreover, Iran 
continues to support international terrorism directed against U.S. citizens. 

Further information on our relations with Iran may be obtained from the State 
Department at (202) 647-6111; travel information from the Travel Advisory Office 
at State at (202) 647-5225; and travel information from the Commerce Department 
Country Specialist at (202) 482-1860. 

Growing American Exports 

Recently,Iranian buyers have increased purchases from American suppliers. U.S. 
exports jumped from $166 million in 1990 to $527 million in 1991 to $780 million 
in 1992. This dramatic rise reflects a growing Iranian interest in ties with Western 
and U.S. business. These figures should not obscure the fact, however, that U.S. ex- 
port controls on Iran and the U.S. embargo on importation of Iranian goods and 
services remain firmly in place. 

Major U.S. exports to Iran include oil drilling and spare parts for machinery. 

Trade Policy Reforms 

Recent Iranian reforms in trade policy have focused on simplifying and reducing 
current requirements. In addition, Iran is now engaged in talks to join the GATT 
and expects to revise its tariff system to conform with GATT rules. 

EXPORTS 

Iranian regulations governing non-oil exports have been liberalized. The Iranian 
Government now requires only a general export registration, rather than an export 
license. In the past, the Iranian (jovemment determined the amount that coula be 
exported based largely on the creditworthiness of the exporter, this requirement was 
eliminated on January 21, 1991. 

IMPORTS 

Iranian regulations governing imports have also been liberalized. Previously, all 
imports were required to be authorized by the Ministry of Commerce before being 
registered by authorized banks. I addition, a foreign exchange allocation had to be 
made by the Ministry concerned, and most imports required the prior approval of 
the relevant procurement and distribution organizations. Effective January 21, 
1991, a private importer no longer needs a specific import license, foreign exchange 
authorization, approval by official angencies. Only a general license, issued by the 
Ministry of Commerce, is required to undertake such imports. 

Developments In Iran 

credit problems 

The Iranian Government recently has had trouble meeting its obligations regard- 
ing standard Iranian letters of credit. Many banks are now refusing to discount Ira- 



166 



nian letters of credit or finance Iranian garde. American exporters should be cau- 
tious concerning terms and conditions of payment from Iranian entities. 

DEVELOPMErJT PLAN MOVING AHEAD 

The $320 billion 5 year (1989-93) development plan should provide a major source 
of reconstruction funding for the economy. Development of the offshore Pars gas 
field, for example, has been allocated to build four substantial dams on several riv- 
ers. The National Petrochemical Company (NPC) has received a $2.2 billion alloca- 
tion for expansion; $1.5 billion has been earmarked for the Hafl Tappeh sugar cane 
agro-industrial complex. 

FREE TRADE ISLANDS 

Iran has announced its intention to develop several islands in the Gulf as free 
trade and industrial zones. Substantial funds have already been devoted to begin- 
ning this program on Qeshm and Kish. The former, a large island in the strait of 
Hormuz, will oe a free trade and industrial zone; the latter, a small island in the 
center of the Gulf, will be more trade-oriented. The Kish Island Development Orga- 
nization (KIDO) hopes to create a trade center rivaling Dubai's extremely successful 
Jebel Ali. 



167 



Rebuttal Statement fron the Department of Commerce, Bureau of Expon 

Administration 



IRAN FACT SHEET 



On September 14, 1993, the House Foreign Affairs' Subcommittee on 
International Security, International Organizations and Human 
Rights held a hearing on the activities of Iran, Syria, Libya, 
and North Korea in attempting to acquire weapons of mass 
destruction. During the course of the hearing, several 
inaccurate or misleading statements were made about the export 
control program of the U.S. Department of Commerce that need to 
be corrected. 

Licenses for Exports to Iran 

The Iran-Iraq Nonproliferation Act, part of the National Defense 
Authorization Act of 1992, requires the denial of all validated 
export licenses for items controlled to Iran for reasons of 
national security, nonproliferation, or foreign policy purposes. 
The Department of Commerce has issued no export license for sales 
to Iran contrary to that Act. In fact, with the exception of a 
few transactions covered by statutory contract sanctity 
provisions, the Commerce Department has issued no export licenses 
for sales to Iran since the effective date of this statute, 
October 23, 1992. 

The few export licenses issued due to contract sanctity were 
closely examined by the Departments of Defense, State, Energy, 
the Arms Control and Disarmament Agency, or the intelligence 
community, as appropriate, to ensure that approval would not 
compromise U.S. interests. To assure that contract sanctity 
existed consistent with the terms of the law, each contract was 
carefully reviewed by the Office of General Counsel. 

G-DEST Exports 

Many low-level U.S. manufactured items do not require a validated 
license to be exported to Iran, and the National Defense 
Authorization Act of 1992 permits such exports. These include 
nonstrategic commercial items such as: general industrial 
products, construction materials, electric power equipment, 
medical equipment, and unsophisticated data processing machines. 
These items may be shipped to Iran under a general license 
authorization, known as G-DEST. Because these items do not pose 
a threat to U.S. interests, no review by the U.S. Government, 
including the Department of Commerce, is required prior to their 
shipment, unless the exporter knows or has reason to know that 
they will be used improperly in the development of weapons of 
mass destruction. 



168 



Increase in G-DEST Shipments to Iran 

The hearing noted an increase in the percentage volume of G-DEST 
shipments to Iran in 1993. This is consistent with the NDAA 
since no validated licenses have been issued since October 23, 
except in performance of a preexisting contract. The fact that 
the percentage volume of G-DEST shipments to Iran has increased 
recently is a reflection that the only remaining trade with Iran 
is in these low level G-DEST items. One cannot properly 
conclude from these facts that U.S. companies are illegally 
exporting controlled items to Iran. 

Allegations of Potential Violations 

In the course of the September 14 hearing, it was implied that 
U.S. exporters were violating the law by shipping items to Iran 
under G-DEST that should have required a validated license (which 
would have been denied under the provisions of the law) . 
Information obtained from Shippers' Export Declarations (SED) for 
several recent G-DEST shipments to Iran were cited in support of 
this allegation. Because of the broad nature of information on 
shipping documents, containing few technical or engineering 
details, it is impossible to ascertain from SEDs if the G-DEST 
authorization has been improperly used. In order to resolve any 
questions, however. Commerce officials have contacted the 
exporters and reviewed the appropriate technical specifications 
of these transactions. 

In one case, it was alleged that the shipment of a "high-tech" 
$907,500 computer had been improperly sent to Iran under G-DEST. 
Export enforcement agents contacted the company and verified the 
G-DEST classification of the computer — a machine that is at 
least two generations old. It is similar to an old IBM 286 
personal computer no longer available even at the corner discount 
computer store. These types of old, low level computers can be 
legally sold to Iran under the law. The reason the price was so 
high was that the computer was attached to a well logging system 
used in the oil and gas industry for measuring oil and gas wells. 
Such well logging equipment is also legally exportable to Iran 
under G-DEST. 

In another case, centrifuge parts were mentioned as a possible 
violation. Upon investigation, it was discovered that these 
centrifuge parts turn out to be centrifugal pumps commonly used 
in the oil industry. The turbojet engines mentioned are gas 
turbines used in electric power generation. 

Commerce enforcement and licensing officials are continuing to 
investigate the cited exports for any improper use of G-DEST, and 
will take appropriate action if any illegal activity has 
occurred. 



169 



Commerce Department Policy 

Statements were made at the September 14 hearing charging the 
Commerce Department with turning a blind eye to shipments to Iran 
and adopting a "Don't Ask, Don't Tell" policy. This is simply 
not true. While consistently following the requirements of the 
law, the Commerce Department has undertaken aggressive and 
effective enforcement actions against those who attempt to 
violate restrictions on trade with Iran. 

Commerce currently has 165 active investigations focused on 
shipments to Iran alone. It has recently completed major 
investigative actions against those attempting to ship items to 
Iran illegally. In one instance, a $2 million mainframe computer 
was stopped before it could be shipped, and the principals of the 
company were arrested. In a second case, telecommunications 
equipment destined for Iran with potential military applications 
was detained by Commerce before it could be exported. One of the 
principals was imprisoned and another is a fugitive currently 
believed to be in Iran. 

The Commerce Department takes its obligations seriously with 
respect to carrying out the provisions of the export control laws 
and preventing illegal shipments to Iran. Commerce will continue 
to closely monitor G-DEST shipments to ensure that violations do 
not go undetected. 

o 



7fi-45fi (Mf^\ 



BOSTON PUBLIC LIBRARY 



3 9999 05982 031 4 



ISBN 0-16-043984-1 



9 780160"439841 



90000